Gold: Sidelined after biggest single-day drop since Sept. 25
- Gold is lacking a clear directional bias in Asia, having dropped 1.74% on Tuesday.
- That was the biggest single-day decline since Sept. 25.
- An above-forecast US Unit Labor Cost data may add to bearish pressures around gold.
Gold is trading in a sideways manner around $1,486 at press time, having dropped by 1.74% on Tuesday to register its biggest single-day drop since Sept. 25.
The metal faced selling pressure on Tuesday even though doubts emerged regarding a potential phase-one of the US-China trade deal.
Nikkei says, “the biggest sticking point is the complete withdrawal of US tariffs. Since summer 2018, the White House slapped duties of up to 25% on about $360 billion worth of Chinese imports. Beijing has refused to budge on this issue since the tariffs have hurt the country's supply chain.”
The safe-haven metal failed to pick up a bid on fading US-China trade tensions, possibly due to an upbeat US data. The ISM Non-Manufacturing Index came in at 54.7, topping expectations of 53.5 in October. The United States Trade Balance came in at $-52.5B in line with forecasts for September.
The US data calendar is light today with Unit Labor Costs (Q3) scheduled at 13:30. A big beat in expectations will likely push the US dollar higher, leading to a drop in gold. Comments from Fed's Evans may also influence the metal.
Technical levels