Gold prices advanced during the Asian trading session as US President Donald trump dampened market optimism brought by the possibility of renewed trade talks between Washington and Beijing.

Trump threw cold water on the idea that trade talks initiated by the White House are aimed at de-escalating tensions between the U.S. and China by tweeting that the country “was under no pressure to make a deal with China.”

After Chinese officials welcomed the invitation, the state-owned newspaper China Daily said in an editorial that Beijing will not buckle to U.S. demands in any trade negotiations.

On Thursday, data showed that inflation pressures in the US are easing, increasing concerns that the Federal Reserve could ease its stance on monetary policy with higher rates seen as negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.

Consumer prices in the US increased by less than expected in August, increasing 0.2% compared to expectations of a gain of 0.3%. The inflation numbers came just a day after data showed the producer price index fell 0.1% last month.

In the meantime, trade talks effort between the US and China have cooled after US President Donald Trumped tweeted that the country “was under no pressure to make a deal with China.”

 

Gold 1H Chart
Gold 1H Chart

 

Bullish Outcome: Above 1209.09 Bollinger band, look for further upside with 1213.16 and 1216.00 in extension.

Bearish Outcome: Below 1209.09 middle Bollinger band, look for further downside with 1205.03 and 1202.80 in extension.