Gold climbs closer to multi-month tops, $1300 mark back on sight

Haresh Menghani FXStreet

• The USD continues to be weighed down by dovish FOMC meeting minutes.
• Fading US-China trade optimism/risk-off mood provides an additional boost.
• Investors now eye speeches by influential FOMC members for a fresh impetus.

Gold prices edged higher on Thursday and moved back within striking distance of multi-month tops, closer to the key $1300 mark.

A combination of supporting factors helped the precious metal to continue gaining positive traction for the second straight session and build on the overnight goodish bounce from the $1280 area.

Expectations that the Fed would halt its rate hike cycle in 2019 were reinforced by Wednesday's FOMC meeting minutes, which revealed that policymakers agreed that they could be patient with further policy firming.

The dovish outlook triggered a fresh leg of downfall in the US Dollar, which extended through the early European trading session on Thursday and continued boosting demand for the dollar-denominated commodity.

Adding to this, fading optimism over US-China trade talks was evident from a slight deterioration in the global risk-appetite and provided an additional boost to the precious metal's safe-haven status.

Reviving safe-haven demand led to some renewed weakness in the US Treasury bond yields, which tends to underpin the non-yielding yellow metal and remained supportive of the ongoing positive momentum.

It would now be interesting to see if the commodity is able to extend the up-move as traders look forward to scheduled speeches by a slew of FOMC members, including the Fed Chair Jerome Powell, for fresh impetus.

Technical levels to watch

On a sustained move beyond the $1300 mark, bulls are likely to aim towards testing $1305-06 intermediate resistance en-route June 2018 swing high, around the $1309-10 region. On the flip side, $1292-90 region now seems to act as immediate support, which if broken might prompt some profit-taking and drag the commodity back towards $1284 horizontal zone ahead of $1280 support area.

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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