- Gold prices are expected to bounce back to approximately $3,180 during early Thursday’s Asian trading sessions.
- A decrease in tensions surrounding the World Trade War tends to affect gold prices negatively.
- Attention will be on the US retail sales and PPI report released later on Thursday.
Gold (XAU/USD) is projected to see a slight profit, nearing $3,180, during the early Asian hours on Thursday. However, the potential gains for this precious metal might be limited because of shifting priorities and progress in trade discussions.
The appeal of precious metals seems to be defensive as easing tensions in the World Trade War are leading investors away from safe havens. Following two days of talks in Geneva, Switzerland, the US and China have tentatively agreed to reduce their respective tariffs. Specifically, the US has cut tariffs on Chinese imports from 145% to 30%, while China has lowered tariffs on US goods from 125% to 10%.
“Overall, improved risk sentiment is diminishing gold’s attractiveness for the time being,” commented Ole Hansen, who heads Product Strategy at Saxo Bank A/S.
On another front, Iran’s chief advisor, Ali Shamhani, stated late Wednesday that Iran is potentially ready to engage in a nuclear deal with President Donald Trump, conditional on the lifting of sanctions. These developments appear to further weaken gold’s standing.
Still, ongoing trade uncertainty and rising geopolitical risks could help cushion gold’s losses. Market participants are particularly focused on the upcoming release of US retail sales and the Producer Price Index (PPI) later on Thursday. Federal Reserve Chairman Jerome Powell is also expected to address the media.
