Gold recovers further from 3-month lows, up little around $1460 level

• Persistent US-China uncertainty helped gain some traction on Wednesday.
• Positive US bond yields, USD strength might keep a lid on any strong gains.
• Wednesday’s key focus will be on the US CPI print and Powell’s testimony.

Gold edged higher through the early European session on Wednesday and built on the previous session’s late rebound from three-month lows.
 
A fresh wave of global risk-aversion trade, amid persistent US-China trade uncertainty, underpinned demand for traditional safe-haven assets and was seen as one of the key factors benefitting the precious metal.

Trade uncertainty remains supportive

The recent optimism over the possibility of a US-China trade deal faded rather quickly after the US President Donald Trump indicated over the weekend that he would only sign if it was the “right deal” for America.
 
Trump on Tuesday further added that the US will increase tariffs on China if the first step of a broader agreement isn’t reached and weighed on investors’ sentiment, which was evident from a negative mood around equities.
 
However, a modest pickup in the US Treasury bond yields extended some support to the US Dollar and might keep a lid on any runaway rally for the dollar-denominated commodity, at least for the time being.
 
Meanwhile, investors might also refrain from placing any aggressive bets, rather prefer to stay on the sidelines ahead of Wednesday’s release of the latest US consumer inflation figures and the Fed Chair Jerome Powell’s testimony.
 
Hence, it will be prudent to wait for some strong follow-through buying before confirming that the commodity might have bottomed out in the near-term and positioning for any further appreciating move towards the $1475 region.

Technical levels to watch