• Benefiting from a modest USD weakness.
• Safe-haven demand provides an additional boost.
• Fed rate hike expectation could cap additional gains.
Gold built on its steady rise through the mid-European session and is currently testing the three-week-old trading range resistance.
Renewed concerns over the US tax reforms plan, following a media report that suggested a delay in implementation of a major corporate tax cut, prompted some fresh US Dollar selling and was seen benefitting dollar-denominated commodities - like gold.
Adding to this, reviving safe-haven demand, following the US President Donald Trump's speech at the South Korean Parliament, addressing tensions with North Korea, provided an additional boost to the yellow metal on Wednesday.
Meanwhile, growing market expectations that the Fed would eventually deliver a third rate hike in December could deteriorate a mildly bullish sentiment and keep a lid on any further up-move for the non-yielding commodity.
Hence, it would now be interesting to see if bulls can maintain their dominant position or the commodity once again fails to move past a strong supply zone near the $1282-84 region, amid absent macroeconomic releases.
Technical levels to watch
A convincing break through the trading range resistance is likely to accelerate the up-move towards $1290 intermediate resistance ahead of the $1295 barrier. On the flip side, $1275 level now becomes an immediate support to defend, which if broken might drag the metal back towards $1269 level en-route $1265 strong horizontal support.
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