- Demand for gold stays strong amid heightened geopolitical concerns.
- US Dollar Index remains in tight range below mid-97s.
- Wall Street looks to open in negative territory on Tuesday.
The precious metal extended its rally on Tuesday and touched its highest level in more than six years at $1,535 as investors continue to seek safe-havens amid a number of factors weighing on the market sentiment. Following the impressive run, the XAU/USD pair is now consolidating its daily gains, still adding nearly 1% around $1,525.
Markets remain risk-averse
The lack of progress in the US-China trade talks, heightened odds of the Federal Reserve cutting rates more than once in the remainder of the year, disappointing macroeconomic data releases from the euro area, the uncertainty surrounding Brexit, the poor performance of emerging markets’ currencies following the crash in Argentinian peso, the ongoing protests in Hong Kong all seem to be forcing investors to stay away from risky assets.
Reflecting the dismal market mood, major European equity indexes suffer heavy losses on Tuesday and Wall Street looks to open deep in the negative territory with the S&P 500 Futures losing more than 0.3% at the moment.
In the early trading hours of the American session, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures. Ahead of the data, the US Dollar Index is posting small daily losses at 97.35.
On Wednesday, Retail Sales and Industrial Production data from China will also be looked upon for fresh signs of a slowdown in the world’s second-largest economy. Stronger-than-expected readings from China could trigger a long-overdue correction in the XAU/USD pair. Disappointing data, on the other hand, are likely to keep bulls in control of the precious metal’s price action.
Technical levels to watch for
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