Gold: Sidelined in Asia amid uptick in US stock futures
- Both gold and US dollar index are flatlined in Asia.
- US stock futures signal sustained risk-on on Wall Street.
- Sino-US tensions and fiscal wrangling in the US may lift USD and put gold under pressure.
Gold is lacking a clear directional bias at press time, having printed a per ounce record high price of $2,055 on Wednesday.
The metal is trading in a sideways manner during the Asian session alongside an uptick in the US stock futures. At press time, the futures tied to the S&P 500 are reporting a 0.20% gain.
Essentially, futures are indicating that American stocks are likely to extend Thursday’s price rally, which was seemingly fueled by expectations for a new coronavirus relief package. As such, the path of least resistance for the safe-haven dollar looks to be on the higher side.
However, the dollar index, which tracks the value of the greenback against majors, is also sidelined near 92.80. If the greenback drops, tracking the uptick in the stock futures, gold may revisit record highs registered on Wednesday.
Also, a bounce in the greenback cannot be ruled out, as China-US tensions are likely to escalate with Taiwan and US planning to hold highest-level talks for the first time since 1979. China claims Taiwan its own territory that it would secure at whatever cost.
In addition, s continued fiscal deadlock in the US could weaken the bid tone around equities, yielding a bounce in the safe-haven dollar,
In both cases, gold may witness a pullback. Take note that the yellow metal is looking overbought, as per the 14-day relative strength index,.