Gold slips to 1-week low, below $1325 level amid fading safe-haven demand
|- Improving risk sentiment continues to weigh on the commodity’s safe-haven status.
- Positive US bond yields/a modest USD uptick further add to the prevalent selling bias.
- The downside is likely to remain limited amid speculations for a Fed rate cut in 2019.
Gold finally broke down of its Asian session consolidation phase and retested its immediate horizontal support near the $1325-24 region in the last hour.
The precious metal remained depressed for the second consecutive session on Tuesday and added to the overnight heavy losses - led by fading safe-haven demand amid encouraging trade-related development.
The US President Donald Trump suspended plans to impose tariffs on Mexico after the two countries reached an agreement on immigration and provided a strong boost to the global risk sentiment on Monday.
The risk-on mood was evident from a solid rebound in the US Treasury bond yields, which underpinned the US Dollar demand and exerted some additional pressure on the dollar-denominated commodity.
The yellow metal dropped to the mentioned support, albeit Trump's fresh threat to raise tariffs on imports from China extended some support and helped stage a late rebound during the US trading session.
The uptick, however, lacked any strong follow-through rather fizzled out quickly amid persistent improvement in the investors' appetite for riskier assets, as depicted by a positive mood around equity markets.
Meanwhile, the downside is likely to remain cushioned in the wake of firming market expectations that the Fed will eventually move to cut interest rates by the end of this year, which tends to benefit the non-yielding metal.
Hence, it would be prudent to wait for a strong follow-through selling before confirming that the commodity might have actually topped out in the near-term and positioning for any further near-term corrective fall.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.