Gold bulls making a fresh attempt to conquer $1300 mark
| • Global trade war fears trigger a wave of risk-aversion trade and boosted safe-haven demand.
• Sliding US bond yields provides an additional boost and supportive of the up-move.
• A goodish pickup in the USD demand seemed to be the only factor capping additional gains.
Gold reversed an early dip to the $1293 support area and has now jumped to fresh session tops, with bulls making a fresh attempt to lift it back above the $1300 mark.
A fresh wave of global risk aversion trade, as depicted by a sea of red across European equity markets, underpinned demand for traditional safe-haven assets and was seen as one of the key factors behind a modest rebound.
Investors turned cautious ahead of the G7 summit, wherein the US President Donald Trump is expected to face backlash over his decision to impose hefty tariffs on steel and aluminium imports and cause a deep diplomatic split between the key allies, raising the risk of a full-blown global trade war.
The risk-off mood was evident from the ongoing retracement slide in the US Treasury bond yields, which provided an additional boost to the non-yielding yellow metal and further collaborated to a modest uptick over the past hour or so.
The positive factors, to a larger extent, were negated by a goodish pickup in the US Dollar demand, which might continue to contribute towards keeping a lid on any meaningful up-move for dollar-denominated commodities - like gold.
Technical levels to watch
Any subsequent strong up-move beyond the $1300 handle is likely to confront resistance near the very important 200-day SMA, around the $1307-08 region, above which the metal seems to head towards testing $1314-15 intermediate resistance en-route $1321-23 supply zone.
On the flip side, $1293-92 area might continue to protect the immediate downside, which if broken could accelerate the slide towards $1287-85 support area before the commodity eventually drops to retest multi-month low level of $1282, set on May 21st.
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