Gold climbs to near 2-week tops, around $1485 region

Gold edged higher on the first trading day of the week and climbed to near two-week tops, around the $1485 region during the early European session.

The precious metal managed to gain some strong positive traction on Monday and finally broke out of its one-week-old trading range. Bulls largely shrugged off the latest optimism over an interim US-China trade agreement, rather took cues from the possibilities of escalating geopolitical tensions in the Korean peninsula.

It is worth recalling that the US President Donald Trump on Saturday said that the US and China would sign their so-called phase one trade pact very shortly. Adding to this, China announced on Monday that it would lower import tariffs from January 1 on around 850 US products – ranging from frozen pork to some type of semiconductors.

However, news that North Korea is poised to test long-range missiles and boost its military prompted some safe-haven buying, which eventually seemed to be one of the key factors underpinning the precious metal. Apart from this, a subdued US dollar price action further extended some support to the dollar-denominated commodity.

As investors looked past Friday's mostly upbeat US economic data, the greenback struggled to attract any follow-through buying through the early European session on Monday. A modest pullback in the US Treasury bond yields kept the USD bulls on the defensive and also played its part in benefitting the non-yielding yellow metal.

Moving ahead, market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data, in order to grab some short-term trading opportunities later during the early North-American session.

Technical levels to watch