Gold spikes to over 1-week tops amid global flight to safety
| • Global risk-aversion trade benefits traditional safe-haven assets.
• Tumbling US bond yields provide an additional boost.
• Resurgent US bond yields now seemed to cap additional gains.
After an initial downtick to sub-$1290 level, Gold caught some fresh bids and jumped to over one-week tops in the last hour.
Investors rushed to buy traditional safe-haven assets on Wednesday after the US President Donald Trump tempered optimism over the progress made in the recent US-China trade talks.
This coupled with resurfacing geopolitical tension amid doubt over the upcoming historic US-North Korea summit in June spoofed global financial markets and helped revive the precious metal's safe-haven demand.
The global risk-off mood was further evident from a sharp fall in the US Treasury bond yields, which provided an additional boost to the non-yielding yellow-metal and remained supportive of the uptick.
Meanwhile, resurgent US Dollar demand was seen as the only factor keeping a lid on any strong up-move for dollar-denominated commodities - like Gold, with bulls now seemed struggling to make it through the $1300 handle.
Moving ahead, today's release of the latest FOMC meeting minutes, due later during the NY trading session, might influence Fed rate hike expectations and provide some meaningful momentum that could assist the commodity to decisively breakthrough a multi-day trading range.
Technical levels to watch
A follow-through momentum beyond the $1300 level is likely to get extended and lift the metal back towards retesting the very important 200-day SMA barrier near the $1307 region.
On the flip side, retracement back below $1293 level might drag the commodity back towards $1288-86 support area, which if broken would turn it vulnerable to resume with the prior downward trajectory.
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.