Gold prices edged higher on Tuesday and climbed to three-day tops, around $1195 area in the last hour. What next to expect? Today's analysis reveals.
2 October, GKFX – A fresh wave of risk-aversion trade underpinned the precious metal's safe-haven demand and helped recover the previous session's down-tick, triggered by optimism over a last-minute US-Canada trade deal.
Gold Fundamental Highlights
Fading global risk-appetite was evident from the ongoing slide in the US Treasury bond yields, which remained supportive of the positive tone surrounding the non-yielding yellow metal.
Growing concerns over Italy's budget plans kept investors on edge and was seen as one of the key factors driving flows towards traditional safe-haven assets, including Treasuries, the Japanese Yen and Gold.
However, a strong bullish upsurge in the US Dollar, primarily led by the ongoing slide in the shared currency and the British Pound, turned out to be the only factor keeping a lid on any further up-move for the dollar-denominated commodity.
In absence of any major market moving economic releases from the US, broader market risk sentiment might continue to influence the momentum ahead of the Fed Chair Jerome Powell's scheduled speech later during the US trading session.
Technical levels to watch
Momentum beyond $1195 level is likely to get extended towards the key $1200 psychological mark ahead of the $1203-04 supply zone. On the flip side, $1190 level now seems to protect the immediate downside, which if broken could drag the commodity back towards $1185 intermediate support en-route the $1180 region.
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