With gold prices down nearly 8% for 2018 so far, "US-China trade tensions and US interest rate expectations remain the key drag on the yellow metal," says the latest weekly note from specialist analysts Metals Focus.

 

Betting on next month's Federal Reserve meeting puts near-certain odds on a rate rise to 2.00%, but betting on the Fed voting to keep rates there in December – rather than hiking again – has edged up from 27% to 31% since this time last month according to data from the CME derivatives group.

 

Policymakers should keep the economy's current position "firmly in mind" when assessing risks and uncertainty, says a Fed research paper published this month, suggesting a more aggressive rate-rising policy amid this summer's raft of strong US data.

 

A rise in US house prices to new all-time highs however – breaching the peaks immediately prior to the subprime and then global financial crash of a decade ago – has now coincided with 7 months of falling demand from the same period last year, new figures showed Wednesday.

 

 

"Resistance [in gold prices] remains unchanged at $1213.20," said  a technical note from bullion bank Scotia Mocatta's New York office overnight, pointing to "the 50% Fibo retracement level of the July high-to-August low range.

 

"Support [was] firm at $1200.70" on Wednesday it said, "[but] momentum remains negative."

 

In Asian trade Thursday, "We are seeing selling from the Chinese banks," said a note from Swiss refining and finance group MKS Pamp's trading desk, with the Dollar's rise versus the Yuan "helping put gold under pressure."

 

Shanghai premiums, over and above London quotes, slipped back beneath $7 per ounce after rising near more typical incentives for new imports into the No.1 consumer market for the first time in a month on Wednesday.