- Risk-off holds the hot-spot as uncertainty surrounding G20 and the US-Iran tussle continues.
- The extended weakness of the US Dollar (USD) adds strength to the buying sentiment.
- Late-2013 high near $1435 is in the spotlight considering macro political plays/monetary easing bias.
With the on-going USD weakness and pessimistic trade/political plays providing background music to the yellow metal’s surge to the multi-year top, the Gold prices are now taking the bids near $1426 during early Tuesday.
The (Federal Open Market Committee) FOMC-led USD decline continues to prevail after Monday’s Dallas Fed Manufacturing Index lagged behind the market consensus.
Adding to the greenback weakness could be the US President Donald Trump’s criticism of the US Federal Reserve’s monetary policy system.
At the geopolitical front, the US and Chinese leaders are to break the deadlocked trade negotiation during this week’s meeting of 20 global leaders (G20) in Japan. However, none of the sides are providing any positive statements to please trade optimists.
Furthermore, Iran continues to stand tough against the US and turns down odds for the talk while the US President levied fresh sanction on the Arab country.
Moving on, today’s speech from the US Federal Reserve Chairman Jerome Powell will be closely observed to validate recent bearish bias spread by the FOMC and its global counterparts.
Technical Analysis
Despite overbought levels of 14-day relative strength (RSI) indicating warnings for a pullback to $1400 and the year 2016 top near $1375, macros support the bullion’s surge towards the late-2013 high around $1435, a break of which could further accelerate the north-run in the direction to $1488 and $1500.
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