Gold prices remain stuck in a tight range since the start of the week. The metal struggles to challenge recent highs but the selling pressure looks limited as well amid a mixed investor sentiment in the global financial markets these days. The upside is limited by the $1,480 area while a local support comes around $1,473.
Lack of news from the trade front coupled with quiet trading conditions ahead of Christmas and New Year holidays made many asset classes confined to limited ranges, which raises the risk of sharp moves ahead. Despite the current lull, gold continues to trade within a short-term bullish trend. In the hourly charts, the bullion is trading above both the 100- and 200-SMAs, which is a bullish signal. Meanwhile, in the daily timeframes, the prices remain below the 100-DMA since early-November. This dynamics points to a limited gold demand which is mainly due to trade optimism.
As for other factors, USD demand has picked up in the short-term charts, which serves as a restraining force for the precious metal. By the way, the greenback feels quite confident despite the recent tweet from Trump who once again called the Federal Reserve to cut rates further and criticized a strong national currency.
After the current consolidation, the precious metal could see a breakout from the tight range due to geopolitical drivers. While the US-China optimism prevails after the two countries managed to avoid fresh mutual tariffs and agreed a partial trade deal, the US-EU conflict may come into market focus. As a reminder, the US trade representative Robert Lighthizer said that Washington may lift tariffs on the European Union next year, citing a very unbalanced relationship between them. Should this topic evolve any time soon, safe-haven demand will pick up. This in turn will play into the hands of gold market.
In this scenario, or in case of other negative news out of the United States or the UK, a pronounced risk aversion may lift the yellow metal above the $1,480 area, up to the 100-DNA around $1,490.
