Gold is stabilizing after a two-day pullback, trading at $3,315.69/oz in early Monday action in Asia, as markets turn their attention to a fresh round of US-China trade talks in London. The metal had shed nearly 2% in the prior sessions amid upbeat US jobs data, which temporarily dented recession concerns and risk-off sentiment.
Key Market Drivers
US-China Trade Talks: Investors are cautiously optimistic as top negotiators meet today. A focus will be China’s role in rare earths, a sensitive strategic resource.
US Treasury Auction: Thursday’s upcoming long-dated bond auction has drawn heightened attention amid global pushback on US debt. A weak auction could further undermine confidence in Treasuries and fuel flows into gold.
Dollar & Real Rates: The Bloomberg Dollar Spot Index is down 0.2%, adding mild support to gold. However, stronger-than-expected US labor data is keeping real yields firm, capping upside for now.
Structural Demand Trends
The People’s Bank of China extended its gold-buying streak to a 7th straight month, continuing a key driver of central bank demand, which has underpinned the metal’s more than 25% rally year-to-date.
Other Metals
Platinum extended its strong run, jumping over 2%, after a 10% surge last week.
Silver inched higher.
Palladium slipped slightly.
Outlook
Gold is holding firm near the $3,300 support zone, with short-term direction hinging on:
Outcome of trade talks
Results of the US bond auction
Shifts in real yields and risk sentiment
A poor bond auction or escalation in trade tensions could revive bullish momentum. Conversely, signs of economic resilience and progress in negotiations may keep gold in a consolidation phase.
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