- The global flight to safety provided a modest lift to the commodity on Monday.
- Resurgent USD demand turned out to be the only factors capping further gains.
- Global growth concerns/trade issues should help limit any meaningful slide.
Gold edged higher during the early European session on Tuesday and remained well within the striking distance of over two-week tops set in the previous session.
The precious metal added to last week's goodish recovery gains from over one-month lows and gained some follow-through positive traction on Monday amid reviving safe-haven demand. Against the backdrop of the recent escalation of geopolitical tensions in the Middle East, a raft of downbeat Euro-zone macro data on Monday fueled concerns about global economic growth and boosted demand for traditional safe-haven assets - including Gold.
Diverging forces failed to provide a fresh impetus
The global flight to safety was further reinforced by a fresh leg of a free-fall in the US Treasury bond yields, which provided an additional boost to the non-yielding yellow metal and remained supportive of the positive momentum. However, a strong pickup in the US Dollar demand turned out to be the only factor that kept a lid on any strong follow-through appreciating move for the dollar-denominated commodity - Gold.
With the greenback holding on to its overnight gains, uncertainty surrounding global trade issues continued lending some support and helped limit any meaningful pullback. In the latest trade-related development, the US-Japan trade talks ended without any solution to the US President Donald Trump's proposed tariffs on the $50 billion in cars and parts shipped by Japan to the US annually.
It, however, remains to be seen if bulls are able to capitalize on the recent positive move or the commodity meets with some supply at higher levels as market participants still await any signs of progress in the US-China trade negotiations. Later during the early North-American session, the US economic docket - highlighting the release of Conference Board's Confidence Index - might be looked upon for some short-term trading opportunities.
Technical levels to watch
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 assets. 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 Open Markets 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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.