Gold is trading in a narrow range near $1290/oz and is set to end the week with a negligible gain marking its fifth weekly rise. Gold has been rising for last few days but still lacks momentum to break and sustain above the key level of $1300/oz.
Gold has become rangebound amid mixed trade in US dollar and equity market. The US dollar index trades mixed near 96 levels as support from Brexit uncertainty and disappointing European economic data is countered by Fed’s patient stance on interest rate hikes.
US equity markets have recovered over 12% from recent lows and this has helped global market stabilize. China’s stimulus measures, Fed patient stance on interest rate hikes and progress in US-China trade talks has helped revive risk sentiment.
However, weighing on market sentiment is concerns about US government shutdown which has continued since December 22. Also weighing on market sentiment is uncertainty about Brexit. The recent development in UK has caused political uncertainty in the region and increased market expectations that Britain may exit the European Union without a deal.