- US-China trade uncertainty continues to benefit traditional safe-haven assets.
- A subdued USD demand/falling US bond yields remain supportive of the uptick.
Gold prices edged higher through the early European session on Tuesday and touched a fresh intraday high level of $1535 in the last hour.
After the previous session’s intraday pullback from multi-year tops, the precious metal regained some positive traction on Tuesday and was being supported by reviving safe-haven demand amid fading optimism over the resolution of the prolonged US-China trade disputes.
Reviving safe-haven demand helped regain traction
Despite the US President Donald Trump’s remarks on Monday that China called the US negotiators and wanted to come back to the negotiating table, the fact that China’s foreign ministry later denied news of any US-China phone calls sent confusing signals on the trade war.
The market skepticism was evident from some renewed weakness in the global equity markets and was further reinforced by falling US Treasury bond yields, which exerted some downward pressure on the US Dollar and remained supportive of the bid tone surrounding the dollar-denominated commodity.
Meanwhile, the ongoing trade war now seemed to have fueled concerns about global growth and a potential recession, which might continue to drive flows towards traditional safe-haven assets and set the stage for a further near-term appreciating move for the commodity.
Later during the early North-American session, the US economic docket – highlighting the release of the Conference Board’s Consumer Confidence Index – might influence the USD price dynamics and contribute towards producing some short-term trading opportunities.
Technical levels to watch