Gold consolidates in a range near $1400 mark, below multi-year tops
|- Escalating geopolitical tensions continue to underpin the commodity's safe-haven demand.
- Dovish Fed outlook remained supportive, though the US-China trade optimism capped gains.
Gold held steady above the key $1400 psychological mark and was seen consolidating the recent strong gains to multi-year tops.
A combination of diverging forces failed to provide any fresh impetus to the commodity and led to a subdued/range-bound price action at the start of a new trading week.
Intensifying geopolitical tensions between the US and Iran, especially after the latter shot down an American surveillance drone last week, benefitted the precious metal's safe-haven status.
This coupled with the latest dovish shift by the FOMC - signalling to cut interest rates by the end of this year, extended some additional support and underpinned the non-yielding yellow metal.
Meanwhile, the US Dollar fell to a near three-month low against a basket of currencies and further collaborated to the strong bullish sentiment surrounding the dollar-denominated commodity.
However, the recent optimism over a possible resolution to the prolonged US-China trade disputes and improving global risk sentiment turned out to be key factors keeping a lid on any strong follow-through.
In absence of any major market moving economic releases, the broader market risk sentiment and the USD price dynamics might continue to influence the price action through Monday’s trading session.
Even from a technical perspective, extreme overbought conditions on the daily chart held investors from placing fresh bets and warrant some near-term consolidation before the next leg of a directional move.
Technical levels to watch
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