Gold consolidates recent upsurge to multi-year tops, comfortable above $1400 mark

Gold held on to its positive tone through the early European session, albeit has eased a bit from multi-year tops set earlier this Tuesday.

The precious metal extended its recent bullish momentum and continued gaining positive traction for the sixth consecutive session on Tuesday. Escalating geopolitical tensions in the Middle East benefitted traditional safe-haven assets and assisted the precious metal to build on last week's post-FOMC upsurge of over 4%.

It is worth mentioning that the Fed, in its latest monetary policy update last Wednesday, showed readiness to cut interest rates by the end of this year to support economic growth and combat subdued inflationary pressures, which was seen as one of the key factors driving flows towards the non-yielding yellow metal.

The commodity rallied to an intraday high level of $1439.08 - the highest since May 2013, though witnessed some profit-taking at higher levels amid highly overbought conditions on the daily chart. Meanwhile, the US Dollar bearish pressure now seems to have receded, at least for the time being, and might further collaborate towards exerting some downward pressure on the dollar-denominated commodity.

Investors' focus now turns to the highly anticipated meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping at the sidelines of G-20 summit later this week, where fresh trade-related developments might influence the broader market risk sentiment and provide some fresh directional impetus.

In the meantime, a scheduled speech by the Fed Chair Jerome Powell on Tuesday will be closely scrutinized for any hints about a possible rate cut move at July meeting. This coupled with the US economic releases - the Conference Board's Consumer Confidence Index, Richmond Manufacturing Index and new home sales data, will be looked upon for some short-term trading opportunities. 

Technical levels to watch