Gold sank for the fourth consecutive day on Tuesday to its lowest levels of the year, while positive economic data pushed stock markets higher. Upbeat data from China increased risk appetite and supported the picture of an improving global economy.
Signs that the U.S. and China are nearing a trade deal after months of negotiation also helped lift equities and dampen demand for safe haven assets such as gold. Over the weekend, U.S. Treasury Secretary Steven Mnuchin stated that he hoped US-China trade talks were approaching a final lap.
However, a dovish Federal Reserve stance on interest rates could push gold higher later in 2019. Also supporting the yellow metal, central banks have been purchasing gold at an increased pace in order to diversify away from currencies and the U.S. dollar. In 2018, Central banks bought the most gold by volume since 1967.
Looking at the gold daily chart above we can see that having fallen to the lowest levels since December 28th, it remains well above the 200 simple moving average with stochastics in oversold territory.