Gold under pressure as risk-on sentiment is back

• The sellers are taking control as Trump, Merkel, and Macron discuss trade practices.
• Gold bears are likely looking at 1,330.00 downside target. 

Gold is trading at around 1.344 down 0.7% on Tuesday as bears were unable to break above the 1.357 level. The fears of an all-out trade war between the US and China are easing and risk appetite is back with all the three major indices in Wall Street posting a sharp rebound since Monday.

Gold bulls took profits close to the 1.350 level amid risk-on sentiment as Trump discussed, on a call, trade practices with China with German Chancellor Merkel and French President Macron. Trump and Merkel talked “joining forces to counter” China’s economic practices and intellectual property theft.

As Gold has been mainly inversely correlated to the US Dollar in the last months, the US Gross Domestic Product (GDP) along with the Fed's favorite inflation indicator , the Personal Consumer Expenditure (PCE) will likely provide some volatility in the yellow metal, especially if the readings show strong deviations. The US macroeconomic news are slated for Wednesday at 12:30 GMT. 

Gold daily chart

Bulls are currently using the 1.340 level as support, if the market breaks through it to the downside the next target is likely seen at 1.330 previous demand zone. Resistance is seen at 1.357 high of Tuesday followed by the 1.360 figure, followed by 1.366 which is the high of the year. 

Gold 4-hour chart

Earlier in the European session, the bulls made an attempt to break the 1.355 level but bears were able to create a reversal down just before 1.357. Bears broke below the last swing low at 1.343,25 jeopardizing the bull trend. The next key support is the 1.330 level with the 100 and 200-period simple moving averages coinciding there, followed by the 1.306 multi-month support. Intraday resistance is seen at the 1.350 figure and the high of the day at 1.357.