Gold adds to gains beyond $1300 mark, hits 1-1/2 week tops

Haresh Menghani FXStreet

• The prevalent cautious mood underpins the commodity’s safe-haven demand.
• A modest USD rebound and positive US bond yields seemed to cap strong gains.
• Traders now eye US durable goods orders data for some meaningful impetus.

Gold held on to its positive tone through the early European session on Wednesday and remained within striking distance of 1-1/2 week tops set earlier today.

After a modest pull-back at the start of this week, a combination of supporting factors helped the precious metal to regain positive traction on Tuesday and decisively break through the key $1300 psychological mark.

Growing Brexit uncertainties, especially after the UK parliament rejected May’s withdrawal deal for the second time on Tuesday, was seen as one of the key factors underpinning the precious metal's relative safe-haven demand.

Adding to this, the release of softer than expected US consumer inflation figures led to some renewed weakness in the US Treasury bond yields and provided an additional boost to the non-yielding yellow metal.

The positive momentum extended through the Asian session on Wednesday and remained supported by the prevalent cautious mood, albeit a modest US Dollar rebound now seemed to cap any strong up-move.

With investors looking past Tuesday's weaker US CPI prints, a modest rebound in the US government bond yields helped revive the USD demand and kept a lid on any runaway rally for the dollar-denominated commodity.

Moving ahead, today's US economic docket, featuring the release of durable goods orders data and PPI figures, will now be looked upon for some fresh impetus later during the early North-American session.

Technical levels to watch

On a sustained move beyond $1306 immediate resistance now seems to lift the commodity further towards $1314-15 supply zone en-route the next major hurdle near the $1320 region. On the flip side, the $1300 handle now seems to protect the immediate downside, which if broken might turn the metal vulnerable to slide further towards the $1286-85 horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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