Gold surges to over 1-month tops, closer to $1240 level

Haresh Menghani FXStreet

• A temporary US-China trade truce weighs on USD and continues to underpin.
• US bond yields fall to 3-month lows and remain supportive of the up-move.
• Risk-aversion trade provides an additional boost to metal’s safe-haven status.

Gold built on overnight strong up-move and surged to over one-month tops, closer to $1240 level during the Asian session on Tuesday.

After yesterday's late pull-back, a combination of supporting factors helped the precious metal to regain positive traction for the second consecutive session, also marking the fourth day of up-move in the previous five.

Against the backdrop of a temporary truce in the US-China trade conflict, a sharp decline in the US bond yields exerted some additional downward pressure on the US Dollar and underpinned demand for the dollar-denominated commodity.

In fact, the benchmark 10-year Treasury bond yield fell to three-month lows, farther below the 3.0% mark, amid growing speculations that the Fed will slow the pace of its interest rate hikes in 2019 and remained supportive of the strong bid tone surrounding the non-yielding yellow metal.

Meanwhile, a fresh wave of global risk-aversion trade, as depicted by a sea of red across equity markets, provided an additional boost to the precious metal's safe-haven status and further contributed to the ongoing positive momentum to the highest level since Oct. 26.

It would now be interesting to see if bulls are able to maintain their dominant position or the up-move once again fizzles out at higher levels as focus shifts to this week's main event - the keenly watched US monthly jobs report, popularly known as NFP.

Technical levels to watch

Any subsequent up-move is likely to confront resistance near the $1243-44 region, above which the momentum could further get extended towards $1250 level. On the flip side, the $1234-33 region now seems to protect the immediate downside, which if broken might accelerate the fall back towards $1227-26 horizontal support.

Author

Haresh Menghani

FXStreet

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

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD stays offered just above 1.1400

EUR/USD keeps the downtrend well in place for yet another day, challenging the 1.1400 contention zone on Tuesday. The continuation of the selling impulse in spot comes amid decent gains in the US Dollar, which continues to find support in the persistent effervescence surrounding the US-Iran crisis.

Middle East crisis intensifies, Gold up

Gold now seems to have embarked on a consolidative phase below the key $4,100 mark per troy ounce in the latter part of Tuesday’s session. Meanwhile, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP rebounds on rising on-chain activity

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.