- Pessimism on the US-China trade deal benefitted gold’s safe-haven status.
- A sharp intraday slide in the US bond yields further extended some support.
- A goodish pickup in the USD demand seemed to have capped the upside.
Gold edged higher on Tuesday, albeit lacked any strong follow-through and remained confined well within the previous session’s narrow trading band.
Despite last week’s announcement that the phase one trade deal is completed, investors turned sceptic amid the lack of enthusiasm from China. The precious metal benefitted from concerns about future trade relations between the world’s two largest economies and a possible re-escalation of the trade war.
Renewed pessimism on partial US-China trade deal seemed to have kept a lid on investors’ appetite for perceived riskier assets and benefitted the precious metal’s safe-haven status. The global flight to safety was reinforced by a sharp fall in the US Treasury bond yields, which further extended some support to the non-yielding yellow metal.
Despite the ongoing fall in the US bond yields, the US dollar managed to regain some positive traction on Tuesday and was seen as the only factor capping any strong gains for the dollar-denominated commodity. Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move.
In absence of any major market-moving economic releases from the US, the broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the commodity’s momentum on Tuesday.
Technical levels to watch
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