• Early optimism fades on a report that the US-China trade talks have stalled. • Surging US bond yields/risk-on mood now seemed to cap additional gains.
Gold reversed an early dip to $1331 level and moved back to the top end of its daily trading range, albeit lacked any follow-through momentum.
A modest US Dollar rebound prompted some initial weakness around during the Asian session on Tuesday. Early optimism, led by Chinese President Xi Jinping's comments, quickly faded in light of a Bloomberg report, saying that the US-China trade talks have stalled over the high-tech industry, and helped the precious metal to bounce off lows.
Further gains, however, remained capped amid a follow-through upsurge in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal. This coupled with a fresh wave of global risk-on trade, as depicted by strong gains across equity markets, further dented the commodity's safe-haven appeal and collaborated towards keeping a lid on any additional up-move.
Traders now look forward to the latest PPI figures, which along with Wednesday's consumer inflation figures and the latest FOMC meeting minutes, might influence Fed rate hike expectations and eventually provide some fresh directional impetus.
Technical levels to watch
Any subsequent up-move is likely to confront immediate resistance near the $1340-41 region, above which the metal seems all set to head towards $1347 level en-route $1350-52 strong barrier. On the flip side, $1331-30 area now seems to have emerged as an immediate support, which if broken could accelerate the fall back towards $1326 level ahead of $1321-20 support zone.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.