The risk-on sentiment continues to abate further on Wednesday, with after mixed flows in Asia, European stock markets slumped on Thursday as trade fears start to reemerge. Investors have already digested the progress on NAFTA and now shift focus on the US-China trade war as the next portion of tariffs is looming.
As such, the dollar bulls could get back into the game as the greenback demand rises in turbulent times, which in turn may derail the tepid recovery in gold prices. The yellow metal reached a two-week high of $1,214 earlier this week and has been drifting lower since as the selling pressure around the buck has eased. So far, it is not enough to press the bullion much lower from the current levels, but a break below the $1,200 threshold will worsen the short-term technical picture.
Considering the recent rally in gold looks vulnerable, investors could proceed to a more aggressive profit-taking ahead of the weekend, so the downside risks start to rise in the daily charts. In the negative scenario, the immediate target for bears comes at $1,198 and then at $1,194.
As such, the dollar bulls could get back into the game as the greenback demand rises in turbulent times, which in turn may derail the tepid recovery in gold prices. The yellow metal reached a two-week high of $1,214 earlier this week and has been drifting lower since as the selling pressure around the buck has eased. So far, it is not enough to press the bullion much lower from the current levels, but a break below the $1,200 threshold will worsen the short-term technical picture.
Considering the recent rally in gold looks vulnerable, investors could proceed to a more aggressive profit-taking ahead of the weekend, so the downside risks start to rise in the daily charts. In the negative scenario, the immediate target for bears comes at $1,198 and then at $1,194.