- The USD remains on the defensive and helped regain positive traction on Tuesday.
- Reviving safe-haven demand provides an additional boost and remained supportive.
- Tuesday’s US housing data eyed for some impetus ahead of FOMC on Wednesday.
Gold prices edged higher through the early European session on Tuesday and spiked to fresh session tops, closer to $1350 level in the last hour.
A combination of supporting factors helped the commodity to regain some positive traction on Tuesday and built on the previous session’s rebound from an intraday low level of $1333. The US Dollar came under some renewed selling pressure on Monday following the release of Empire State Manufacturing Index and underpinned demand for the dollar-denominated commodity.
The latest disappointment cemented expectations that the Fed will eventually move to cut interest rates by the end of this year and was evident from a fresh leg of downslide in the US Treasury bond yields, which further collaborated to driving flows towards the non-yielding yellow metal.
This coupled with reviving safe-haven demand, amid fears of a further escalation in trade tensions between the world’s two largest economies and rising geopolitical tensions in the Middle East, provided an additional boost to the precious metal and remained supportive of the follow-through goodish up-move.
The US-China trade tensions showed no signs of a potential de-escalation after the US Commerce Secretary Wilbur Ross recently turned down chances of any breakthrough from the meeting between the US President Donald Trump and his Chinese counterpart at the sidelines of the upcoming G-20 meeting.
It, however, remains to be seen if bulls are able to capitalize on the positive momentum or refrain from placing any further aggressive bets as the market focus remains on this week’s key event risk – the latest FOMC monetary policy update, scheduled to be announced on Wednesday.
In the meantime, Tuesday’s US economic docket – featuring the second-tier releases of housing starts and building permits will now be looked upon for some short-term trading impetus later during the early North-American session.
Technical levels to watch
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