Progress in the US-China trade negotiations is the key driver for the precious metal and this is the major downside risk for prices at this stage. The latest sell-off in gold came as Chinese commerce ministry announced that is has agreed with Washington on removing the existing tariffs.
On the other hand, the euphoria in the global financial markets looks overdone as neither side specifies any details or timetables, which brings some uncertainty. From this perspective, the recent sell-off in the yellow metal may have been too aggressive, which means the recovery could be fairly rapid should risk sentiment wane any time soon.
In the weekly charts, gold is set for the biggest weekly drop since May 2017. On Friday, the bullion makes some attempts but downside risks still prevail, especially as the prices remains below the 200-DMA around $1,476, which is the immediate target for gold bulls.