Gold: Buyers and sellers jostle around $1275
|- Global risk-on favors the buyers but greenback strength limits the rise.
- Successful break of $1280 – $1270 range could trigger additional volatility.
Gold is on the rounds near $1275 while heading into the European session on Tuesday. While the return of global traders from holidays favored the safe-haven demand of the yellow metal, greenback strength limits the upside.
The bullion has been struggling between $1271 and $1280 recently as Easter recess confined market moves.
Global investors are particularly more concerned about political plays surrounding Brexit, Iran sanctions and the US – North Korea due to the latest developments challenging the risk sentiment.
While question to the UK PM Theresa May’s position and Brexit deadlock threatens the GBP buyers, doubts over another round of Geopolitical tensions relating to the US, Iran and North Korea is something that supports caution amid macro traders.
Though, the recent strength of the US Dollar (USD) on the back of risk aversion amid upbeat equity market performance and welcome data during last-week limits the precious-metal upside.
The 10-year yield on the US government notes is considered to be a barometer of market risk and it presently is in the negative territory while flashing 2.578% returns.
Looking forward, thin economic data highlights the developments relating to Brexit, the US-China trade talks and other political challenges including the US.
Gold Technical Analysis
While the recent high around $1280 and a support-turned-resistance line since January 21 can challenge the Gold buyers at $1282, a break of which could escalate the recovery to 100-day simple moving average (SMA) level near $1290.
On the downside, $1271 and an eight-month old upward sloping trend-line, at $1262, seem crucial for sellers to observe as they hold the door to 200-day SMA level of $1251.
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