• Improving risk sentiment continues to weigh on the commodity’s safe-haven status.
  • Positive US bond yields/a modest USD uptick further add to the prevalent selling bias.
  • The downside is likely to remain limited amid speculations for a Fed rate cut in 2019.

Gold finally broke down of its Asian session consolidation phase and retested its immediate horizontal support near the $1325-24 region in the last hour.

The precious metal remained depressed for the second consecutive session on Tuesday and added to the overnight heavy losses - led by fading safe-haven demand amid encouraging trade-related development.

The US President Donald Trump suspended plans to impose tariffs on Mexico after the two countries reached an agreement on immigration and provided a strong boost to the global risk sentiment on Monday.

The risk-on mood was evident from a solid rebound in the US Treasury bond yields, which underpinned the US Dollar demand and exerted some additional pressure on the dollar-denominated commodity.

The yellow metal dropped to the mentioned support, albeit Trump's fresh threat to raise tariffs on imports from China extended some support and helped stage a late rebound during the US trading session.

The uptick, however, lacked any strong follow-through rather fizzled out quickly amid persistent improvement in the investors' appetite for riskier assets, as depicted by a positive mood around equity markets.

Meanwhile, the downside is likely to remain cushioned in the wake of firming market expectations that the Fed will eventually move to cut interest rates by the end of this year, which tends to benefit the non-yielding metal.

Hence, it would be prudent to wait for a strong follow-through selling before confirming that the commodity might have actually topped out in the near-term and positioning for any further near-term corrective fall.

Technical levels to watch

XAU/USD

Overview
Today last price 1326.08
Today Daily Change -1.86
Today Daily Change % -0.14
Today daily open 1327.94
 
Trends
Daily SMA20 1298.66
Daily SMA50 1290.39
Daily SMA100 1299.08
Daily SMA200 1266.04
Levels
Previous Daily High 1337.65
Previous Daily Low 1325.21
Previous Weekly High 1348.12
Previous Weekly Low 1306.18
Previous Monthly High 1306.9
Previous Monthly Low 1266.35
Daily Fibonacci 38.2% 1329.96
Daily Fibonacci 61.8% 1332.9
Daily Pivot Point S1 1322.89
Daily Pivot Point S2 1317.83
Daily Pivot Point S3 1310.45
Daily Pivot Point R1 1335.33
Daily Pivot Point R2 1342.71
Daily Pivot Point R3 1347.77

 

 

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