Gold hangs near 6-month lows, around $1280 level
| • Escalating US-China trade tensions prompt some safe-haven buying.
• Persistent USD buying keeps a lid on any meaningful up-move.
Gold struggled to register any meaningful recovery and remained within striking distance of near six-month lows set on Friday.
The ongoing US Dollar rally, supported by last week's hawkish Fed rate hike move was seen as one of the key factors weighing heavily on dollar-denominated commodities - like gold on Friday.
The USD buying remained unabated at the start of a new trading week, albeit escalating US-China trade tensions provided a minor boost to the precious metal's safe-haven demand.
This coupled with deteriorating risk appetite, as depicted by weaker trading sentiment around equity markets and further reinforced by retracing US Treasury bond yields, extended some additional support to the non-yielding yellow metal.
The uptick, however, lacked any strong conviction and could also be attributed some short-covering amid near-term oversold conditions. Hence, it would be prudent to wait for a strong follow-through buying before confirming that the commodity might have bottomed out in the near-term.
Technical levels to watch
A sustained move back above $1282 level might assist the metal to recover back towards $1286-87 supply zone and any subsequent momentum now seems to be capped near $1292-93 strong resistance. On the flip side, $1275 level (Friday's swing low) is likely to protect the immediate downside and is followed by a long-term ascending trend-line support near the $1272 region.
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