Gold climbs to over 1-week tops, around $1520 region
- Escalating geopolitical tensions/US-China trade pessimism underpinned safe-haven assets.
- A sharp fall in the US bond yields offset a pickup in the USD demand and remained supportive.
Gold edged higher through the early European session on Monday and is currently placed at over one-week tops, around the $1520 region.
Reviving demand for traditional safe-haven assets helped the precious metal to regain positive traction for the third consecutive session on Monday and build on its recent recovery move from over one-month lows, touched in the aftermath of a hawkish rate cut by the Fed.
Reviving safe-haven demand remained supportive
News that five Yemeni civilians were killed in airstrikes by the Saudi-led coalition added to the recent escalation of geopolitical tensions in the Middle East. This coupled with not so encouraging trade-related developments on Friday further underpinned the commodity's safe-haven demand.
The US President Donald Trump told reporters on Friday that he is not looking for a partial deal, while China's trade delegation unexpectedly cancelled a visit to the US farms and dampened prospects for an interim trade deal between the world's two largest economies.
Risk sentiment took another hit on Monday following the disappointing release of Euro-zone PMI prints, which further fueled concerns over slowing global growth. The global flight to safety was reinforced by sliding US bond yields and provided an additional boost to the non-yielding yellow metal.
Meanwhile, a goodish pickup in the US Dollar demand, primarily on the back of fresh selling around the shared currency, did little to hinder the intraday uptick, albeit might turn out to be the only factor keeping a lid on any strong follow-through up-move for the dollar-denominated commodity - Gold.
In absence of any major market-moving economic releases from the US, scheduled speeches by influential FOMC members - New York Fed President John Williams and St. Louis Fed President James Bullard - will now be looked upon for some short-term trading impetus.
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.
