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

Haresh Menghani FXStreet

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.

• US Dollar stays depressed near 93.30

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.

• Fed ready to hike in December – UOB

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.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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