Gold rallies to session tops, around $1285 level amid reviving safe-haven demand
• Fears of a further escalation in the US-China trade tensions underpin safe-haven demand.
• The ongoing slump in the US bond yields remained supportive of the positive momentum.
• Bullish traders seemed rather unaffected by a mildly positive tone surrounding the USD.
Gold caught some fresh bids on Wednesday and recovered a major part of the overnight sharp pullback amid reviving safe-haven demand.
The safe-haven commodity failed to benefit from reports of a further escalation in the US-China trade tensions and dropped sharply on Tuesday, weighed down by a modest pickup in the US Dollar demand. However, a sharp intraday slide in the US equity markets extended some support and helped stall the downfall.
The precious metal built on the overnight bounce and now seemed to take cues from the ongoing slump in the US Treasury bond yields. In fact, yields on the benchmark 10-year US government bond fell further below the 2.25% - the lowest since September 2017, and underpinned demand for the non-yielding yellow metal.
Bullish traders seemed rather unaffected by a mildly positive tone surrounding the greenback, which tends to dent demand for the dollar-denominated commodity, though are likely to wait for a convincing break through the $1287-88 supply zone before positioning aggressively for any further near-term appreciating move.
There isn't any major market moving US economic data due for release on Wednesday and hence, the broader market risk sentiment, driven by fresh trade-related headlines, might continue to act as a key determinant of the commodity's momentum.
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.
