Gold spikes to session tops, back above $1300 mark amid the prevalent USD selling bias
| • The prevalent USD selling bias helps regain some positive traction in the last hour.
• US-China trade uncertainty underpins safe-haven demand and remained supportive.
• Positive US bond yields/improving risk-sentiment might keep a lid on strong up-move.
Gold quickly reversed an Asian session dip to $1298 area and spiked to fresh session tops in the last hour, back closer to the previous session's swing high.
Despite a mildly positive tone around the US Treasury bond yields, the US Dollar bulls remained on the defensive at the start of a new trading week and turned out to be one of the key factors benefitting the dollar-denominated commodity.
This coupled with some renewed uncertainty over a possible breakthrough in the US-China trade deal further underpinned the precious metal's relative safe-haven demand and remained supportive of the latest leg of an up-move.
The uptick seemed rather unaffected by improving risk sentiment, as depicted by the prevalent bullish trading sentiment around equity markets, though might act as the only factor keeping a lid on any runaway rally.
Moreover, investors might also be reluctant to place any aggressive bids ahead of this week's key event risk - the latest FOMC monetary policy update, which might provide a fresh directional impetus for the non-yielding yellow metal.
Hence, it would be prudent to wait for a strong follow-through buying before traders start positioning for any further near-term appreciating move amid absent relevant market moving US economic releases on Monday.
Technical levels to watch
Immediate resistance is pegged near the $1309-10 region, above which the momentum could get extended further towards the $1314 intermediate hurdle en-route $1320 supply zone. On the flip side, the $1298-96 region now seems to have emerged as immediate support, which if broken might turn the commodity vulnerable to slide back towards testing $1287-85 horizontal region.
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