- Gold jumps to the highest level since 2013 on US-Iran tensions.
- Extremely overbought conditions prompted some profit-taking.
Gold maintained its strong bid tone through the early European session, albeit trimmed a part of its early gains to the highest level since April 2013.
The safe-haven precious metal added to the last week's positive momentum and continued gaining positive traction for the fifth consecutive session on Monday. Heightened geopolitical tensions in the Middle East turned out to be one of the key factors benefitting traditional safe-haven assets and driving the commodity higher on the first day of a new trading week.
The global flight to safety was further reinforced by some follow-through weakness in the US Treasury bond yields, which further played its part in driving flows towards the non-yielding yellow metal. Meanwhile, a subdued US dollar price action did little to influence demand for the dollar-denominated commodity or hinder the ongoing bullish trajectory.
The commodity rallied to an intraday high level of $1588 but now lost some traction amid optimism over the US-China phase one trade deal. Traders seemed inclined to take some profits off the table amid extremely overbought conditions on the daily chart, making it prudent to wait for some corrective slide before initiating any fresh bullish positions.
In the absence of any major market-moving economic releases from the US, the broader market risk sentiment might continue to play a key role in influencing the commodity's momentum and produce some meaningful trading opportunities.
Technical levels to watch
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