“¢ Rising diplomatic tensions continue to underpin safe-haven demand.
“¢ Subdued USD price-action remains supportive of a mildly positive tone.
“¢ A modest uptick in the US bond yields seemed to cap meaningful up-move.
Gold traded with a mild positive bias on Tuesday and remained within striking distance of 2-1/2 month high, set in the previous session.
A combination of positive factors helped the precious metal to build on last week’s strong bullish momentum and lifted it to an intraday high level of $1233.30, the highest since July 26.
Rising diplomatic tensions between Western powers and Saudi Arabia, over the disappearance of journalist Jamal Khashoggi, was seen underpinning the precious metal’s safe-haven status.
This coupled with some renewed US Dollar selling bias, further aggravated by Monday’s disappointing release of US monthly retail sales data, provided an additional boost to the dollar-denominated commodity.
The momentum lifted the commodity beyond the 100-day SMA for the first time since late-April, though a modest uptick in the US Treasury bond yields kept a lid on any runaway rally for the non-yielding yellow metal.
With the USD struggling to gain any traction, a follow-through up-move, supported by some technical buying, remains a distinct possibility amid absent relevant market moving economic releases from the US.
Technical levels to watch
The $1233-35 region might continue to act as an immediate resistance, above which the metal is likely to aim towards testing $1241 intermediate hurdle en-route the $1248 supply zone.
On the flip side, $1224 area is likely to act as an immediate support, which if broken might prompt some profit-taking and accelerate the fall further towards $1215 horizontal support.
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