• The prevalent risk-off mood continues to underpin the commodity’s safe-haven demand.
• A subdued USD price-action provides an additional boost and remained supportive.
Gold reversed an Asian session dip to $1311 area and has now moved within striking distance of the post-FOMC swing highs, or three-week tops.
The precious metal built on last week’s goodish up-move of over 1%, also marking its third consecutive weekly gains and remained supported by reviving safe-haven demand amid growing fears of a slowing global economic growth, as indicated by the inversion of the US bond yield curve for the first time since 2007.
Indications of recession sent global stocks lower on Friday and the sell-off extended through the early European session on Monday, which eventually turned out to be one of the key factors underpinning the precious metal’s safe-haven demand for the second straight session.
Meanwhile, a subdued US Dollar price action provided an additional boost to the dollar-denominated commodity and remained supportive of the ongoing positive momentum back closer to three-week tops touched in reaction to a more dovish FOMC policy update.
In absence of any major market moving economic releases, the broader market risk sentiment and the USD price dynamics might continue to play a key role in influencing the commodity’s momentum on the first day of a new trading week.
Technical levels to watch