Gold consolidates in a range near $1400 mark, below multi-year tops
- Escalating geopolitical tensions continue to underpin the commodity's safe-haven demand.
- Dovish Fed outlook remained supportive, though the US-China trade optimism capped gains.
Gold held steady above the key $1400 psychological mark and was seen consolidating the recent strong gains to multi-year tops.
A combination of diverging forces failed to provide any fresh impetus to the commodity and led to a subdued/range-bound price action at the start of a new trading week.
Intensifying geopolitical tensions between the US and Iran, especially after the latter shot down an American surveillance drone last week, benefitted the precious metal's safe-haven status.
This coupled with the latest dovish shift by the FOMC - signalling to cut interest rates by the end of this year, extended some additional support and underpinned the non-yielding yellow metal.
Meanwhile, the US Dollar fell to a near three-month low against a basket of currencies and further collaborated to the strong bullish sentiment surrounding the dollar-denominated commodity.
However, the recent optimism over a possible resolution to the prolonged US-China trade disputes and improving global risk sentiment turned out to be key factors keeping a lid on any strong follow-through.
Even from a technical perspective, extreme overbought conditions on the daily chart held investors from placing fresh bets and warrant some near-term consolidation before the next leg of a directional move.
Technical levels to watch
This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.