- Fed rate cut expectations helped gain some traction on Monday.
- US-China trade optimism/positive US bond yields capped gains.
Gold refreshed daily tops during the early European session, albeit lacked any strong bullish conviction and remained well below three-week tops set on Friday.
The precious metal failed to capitalize on its goodish intraday positive move on Friday, rather witnessed some selling near the $1520 region amid fading safe-haven demand. This coupled with a late pickup in the US Dollar demand exerted some additional downward pressure on the dollar-denominated Gold.
Upside remains limited
Meanwhile, expectations that the Fed will cut interest rates further at its upcoming meeting on October 29-30 helped the non-yielding yellow metal to regain some positive traction on Monday. However, a combination of negative forces kept a lid on any strong follow-through move up, at least for now.
The Greenback remained well supported by the ongoing recovery in the US Treasury bond yields, while the incoming positive trade-related headlines remained supportive of a generally risk-on mood and continued weighing on the precious metal’s perceived safe-haven status.
In the latest development, the US Trade Representative’s office said on Friday that the US and China have made progress in trade talks and have come close to finalizing parts of a “phase one” trade deal. The US officials have said they hope to sign a deal in mid-November.
In absence of any major market-moving economic releases from the US, the commodity seems more likely to continue with its subdued/range-bound price action as investors start repositioning for this week’s key event risk – the latest FOMC monetary policy update scheduled later this week.
Technical levels to watch
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