“¢ Fears of a global economic slowdown boost the precious metal’s safe-haven status.
“¢ The ongoing slump in the US bond yields/subdued USD demand remains supportive.
Gold continued scaling higher through the mid-European session on Monday and climbed to over two-month tops, around the $1317-18 region in the last hour.
The precious metal witnessed a strong follow-through positive move for the third consecutive session on Monday and added to last week’s strong gains, beyond the key $1300 psychological mark amid risk-off environment.
Against the backdrop of the recent escalation in the US-China trade tensions, the US President Donald Trump’s threat to impose tariffs on Mexico fueled worries of a global economic slowdown and benefitted safe-haven status bullion.
Adding to this, investors now seemed convinced that the gloomy outlook might now force the Fed to cut interest rates sooner rather than later and provided an additional boost to the non-yielding yellow metal.
Meanwhile, the ongoing slump in the US Treasury bond yields exerted some downward pressure on the US Dollar and remained supportive of the strong bid tone surrounding the dollar-denominated commodity.
Monday’s strong up-move could further be attributed to some technical buying above 100-day SMA barrier and hence, a move towards March monthly swing high, around the $1325 area, now looks a distinct possibility.
Traders now look forward to the release of ISM manufacturing PMI for some impetus, though the broader market sentiment and the USD price dynamics might continue to act as key determinants of the commodity’s momentum.
Technical levels to watch
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