- Gold gains some traction for the second straight session on Tuesday.
- Persistent trade uncertainties underpinned traditional safe-haven assets.
- The upside is likely to remain limited ahead of the FOMC policy update.
Gold edged higher for the second consecutive session on Tuesday and built the overnight modest gains, albeit lacked any strong follow-through.
Persistent uncertainty over a potential phase one trade deal between the world's two largest economies continued weighing on the global risk sentiment. The same was evident from a weaker tone around equity markets and underpinned demand for traditional safe-haven assets, including gold.
Bulls take cues from trade uncertainty
It is worth recalling that the deadline for the next round of US tariffs on around $156 billion worth Chinese products is December 15. However, the Agriculture Secretary Sonny Perdue fueled some optimism on Monday and said that the US is unlikely to impose more tariffs.
The global flight to safety was further reinforced by a weaker tone surrounding the US Treasury bond yields further played their part in driving some flows towards the non-yielding yellow metal. Meanwhile, a subdued US dollar price action did little to influence the dollar-denominated commodity, albeit remained supportive.
Further gains, however, are likely to remain limited amid absent relevant fundamental catalyst. This coupled with investors' reluctance to place any aggressive bets ahead of the highly anticipated FOMC decision on Wednesday might further contribute towards capping any strong gains.
Technical levels to watch
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