• Reviving safe-haven demand largely offset by Fed rate hike expectations.
• The prevalent USD bullish sentiment further contributes towards capping.
Gold reversed an early uptick to $1217 level, closer to weekly tops, and is currently placed at the lower end of its daily trading range, albeit lacked any firm directional bias.
The precious metal has struggled to register any meaningful recovery and remains within striking distance of YTD lows, set last Friday. A combination of diverging forces failed to provide any meaningful impetus and led to the recent subdued trading action within a broader trading range, held over the past one week or so.
Escalating trade conflicts between the world's two largest economies seemed lending some support to the precious metal's safe-haven appeal. The positive factor, to a larger extent, was negated by firming expectations about gradual Fed rate hike path, which has been one of the key factors keeping a lid on any attempted recovery move for the non-yielding yellow metal.
Meanwhile, some renewed US Dollar buying interest since the early European session could be the only reason prompting some fresh selling around the dollar-denominated commodity. Further downside, however, remained limited amid the prevalent cautious mood around European equity markets.
Moving ahead, today's release of US Producer Price Index (PPI) will be looked upon for some trading impetus. The key focus, however, will remain on Friday's US consumer inflation figures, which might provide the required momentum to finally assist the commodity to breakthrough its near-term trading range.
Technical levels to watch
The $1217-18 zone might continue to act as an immediate hurdle, above which the metal is likely to aim towards testing $1221-22 supply zone before eventually darting towards $1231 strong horizontal resistance.
On the flip side, $1206 area remains an immediate strong support to defend, which if broken might accelerate the downfall towards testing the key $1200 psychological mark.
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