Gold headed to $ 1280 amid increased flight to safety?

Gold prices on Comex extended its rebound from weekly lows and now hovers near 3-day tops of $ 1272.80, as demand for the safe-havens is on the rise across the financial markets amid escalating geo-political tensions between the US and North Korea over the missile threat.

Amid intensifying risk-off condition, markets paid little attention to the Chinese Inflation data, as they sought to protect their capital in the yellow metal, the ultimate safe-haven asset. Hence, risk assets such as Treasury yields, oil and equities were heavily hit.

Risk sentiment turned sour in the US last session, after a confidential assessment report prepared by US intelligence officials on North Korea’s nuke threat was reported by the Washington Post.

In response to this report, the US President Trump said that if North Korea escalates nuclear threat, 'they will be met with fire and fury like the world has never seen,” while the North Koreans responded with plan to fire missiles at Guam, a US pacific island.

On Tuesday, gold staged a solid comeback from a sudden drop to weekly lows of $ 1257.26, triggered by a fresh bout of USD buying across the board, after the US JOLTS job openings data hit a record high last month. US: Job Openings at a record high - Wells Fargo

Looking ahead, the yellow metal will remain underpinned amid widespread risk-aversion until the releases of the US economic data due on the cards in the NA session, which may offer some fresh impetus to the USD-sensitive commodity.

Gold: Technical levels

“If we continue higher look for 1276/77. Above 1279 then targets 1283 & 1289 before the 1295 double top high for this year. I think this will be broken on the third test for an added buy signal. Failure to hold above 1258/57 however is more negative & signals a false breakout last week. Further losses initially target 1249/47. A break below 1243 risks a slide to 1240/39 then 1235/34 & perhaps as far as support at 1232/31,” explains Jason Sen at Day Trade Ideas.