Gold stabilizes above $4,000 as bulls attempt to regain short-term control
Gold (XAU/USD) is attempting to stabilize on Wednesday after a brutal selloff from record highs the previous day, though the metal remains under pressure as broader risk sentiment improves. At the time of writing, XAU/USD is trading around $4,065, down over 1.0% after briefly dipping to $4,004 earlier in the day.
Bargain hunters are stepping in near the $4,000 psychological mark, but the rebound so far remains shallow as the US Dollar (USD) holds firm. A stronger Greenback continues to pressure bullion, making it more expensive for overseas buyers. However, subdued US Treasury yields are offering some relief, lending partial support to the non-yielding metal.
Meanwhile, investor optimism that a renewed escalation in US-China tariffs can be avoided, with high-level trade talks scheduled later this week, has curbed safe-haven demand.
In the near term, Gold’s bias appears mildly bearish as markets continue to digest Tuesday’s sharp correction. However, the broader outlook remains constructive. The metal could regain traction if trade tensions flare up or if risk sentiment deteriorates.
Meanwhile, downside risks are likely limited by expectations of a dovish Federal Reserve (Fed) stance, the prolonged United States (US) government shutdown, and persistent geopolitical and economic uncertainties that continue to underpin long-term demand for safe-haven assets.
Source: FXstreet.com
