Gold consolidates around $1290, focus remains on FOMC minutes

Gold was seen oscillating within a narrow trading range and now seems to have entered a bullish consolidation phase around the $1290 region.

A combination of diverging factors, like weaker US Dollar and a modest pickup in the US Treasury bond yields, has led to a range-bounce price action on Wednesday. 

An offered tone around the greenback was seen underpinning demand for the dollar-denominated commodity, while higher US bond yields kept a lid on any meaningful up-move for the non-yielding precious metal.

   •  US 10-year yield at the upper end of the six-month range - BBH

Moreover, traders also seemed refraining from placing aggressive bets and awaited the minutes of the Federal Reserve’s September monetary policy meeting, which is widely expected to reinforce expectations for a December rate hike.

   •  FOMC meeting minutes in focus – Deutsche Bank

The yellow metal, however, has managed to hold with minor gains for the fourth consecutive session amid safe-haven demand on heightened geopolitical tensions over the Korean peninsula. 

This coupled with uncertainty over the US President Donald Trump's proposed tax reform plans might continue to limit any immediate sharp downslide for the commodity.

Technical levels to watch

On a sustained move beyond $1293-94 immediate resistance, the metal seems more likely to surpass the $1300 handle and head towards testing $1308-09 resistance area. Alternatively, weakness below $1286-85 zone might accelerate the fall below $1280 level towards its next support near the $1276 region.