Gold climbs to fresh 7-week tops, just above $1490 level
- Gold gains follow-through traction for the second straight session on Tuesday.
- Concerns about deteriorating US-China relations benefited safe-haven assets.
- The upside is likely to remain capped ahead of the key $1500 psychological mark.
Gold maintained its strong bid tone for the second consecutive session on Tuesday and climbed to seven-week tops, around the $1490 region in the last hour.
The precious metal added to the previous session's positive move and gained some follow-through traction through the early European session on Tuesday amid renewed concerns about US-China relations.
As investors looked past the latest trade optimism, China's criticism over the US interference in its internal affairs – concerning Taiwan, Hong Kong – underpinned the precious metal's perceived safe-haven status.
The comments raised concerns over an interim agreement between the world's two largest economies, which coupled with a subdued US dollar price action provided a goodish lift to the dollar-denominated commodity.
The greenback remained on the defensive in the wake of the overnight dismal US macro data, showing that the Durable Goods Orders data plunged by 2% in November and missed consensus estimates by a big margin.
Meanwhile, the global flight to safety was further evident from a modest pullback in the US Treasury bond yields, which further played its part in driving flows towards the non-yielding yellow metal and remained supportive.
Moving ahead, there isn't any major market-moving economic data due for release from the US. Moreover, the US markets will close earlier on the back of Christmas Eve, which might prompt traders to unwind their bullish bets.
Hence, any subsequent positive move still runs the risk of fizzling out rather quickly near the $1495 confluence barrier, comprising of 100-day SMA and the top end of a 1-1/2-month-old ascending trend-channel on the daily chart.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
