US-China trade optimism seemed to weigh on the commodity’s safe-haven status. The recent optimism over a possible US-China trade deal remained supportive of the prevalent risk-on mood and continued denting demand for traditional safe-haven assets.
In the latest trade-related development, the US President Donald Trump said on Tuesday that we are in the final throes of a very important deal with China that would defuse a 16-month trade spat.
Focus on trade, US macro data
Trump’s words added to the earlier positive remarks by China’s Commerce Ministry that negotiators from both sides had spoken on the phone and agreed to more talks aimed at reaching a deal. Encouraging signs on trade talks between the world’s two largest economies turned out to be one of the key factors that kept a lid on the precious metal’s overnight rebound.
The downside, however, remained cushioned amid a subdued US dollar demand, which tends to lend support to the dollar-denominated commodity. Moreover, investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of Wednesday’s important US macro data, including Durable Goods Orders and the second estimate of Q3 GDP growth figures.
Wednesday’s US economic docket also features some second-tier releases – Pending Home Sales, Personal Income and Spending data. This might further influence the USD price dynamics and produce some meaningful trading opportunities later during the North-American session.