Gold spikes to two-week tops on safe-haven demand and weaker USD

Gold continued climbing for the third consecutive session and clocked 2-week highs, above $1290 level, during mid-European session on Tuesday. 

The precious metal was seen drawing support from global flight to safety on worries over a sudden outburst in tensions between the US and North Korea. 

The concern escalated further after Russia’s news agency, Interfax (IFX), quoted a Russian lawmaker saying that North Korea possesses a ballistic missile with a range of 3,000 km and after modernization if will be able to reach the US territory.

Meanwhile, a softer US Dollar was also seen lending support to dollar-denominated commodities and further collaborated to the yellow metal's up-move to $1290 level.

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It, however, remains to be seen if the upmove is sustainable amid growing expectations that the Fed would raise interest rates for the third time this year, which might eventually keep a check on any additional gains for the non-yielding metal. 

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Technical levels to watch

A follow through buying interest has the potential to lift the commodity closer to $1300 mark, above which the momentum could get extended towards $1308-09 horizontal resistance.

On the flip side, $1284 level now seems to protect immediate downside, which if broken would turn the metal vulnerable to retest 100-day SMA support near the $1273 region with some intermediate support near $1280 area.