Gold stages a goodish bounce from 1-week lows, still below $1400 mark
- Reviving safe-haven demand helped regain positive traction on Tuesday.
- Sliding US bond yields weigh on the USD and provided an additional boost.
Gold regained positive traction during the Asian session on Tuesday, albeit remained well below the key $1400 psychological mark.
In a knee-jerk reaction to a trade truce between the US and China, the precious metal opened with a bearish gap and subsequently dropped to over one-week lows on the first trading day of the week.
The downtick lacked any follow-through on Tuesday, rather was quickly bought into amid reviving safe-haven demand after the US government threatened to impose tariffs on $4 billion of additional EU goods.
This coupled with concerns over global economic growth - reinforced by the awful manufacturing PMIs released since the weekend, weighed on investors' sentiment and benefitted the precious metal's safe-haven status.
The prevailing cautions mood was reinforced by sliding US Treasury bond yields, which undermined demand for the US Dollar and provided an additional boost to the non-yielding/dollar-denominated commodity.
It would now be interesting to see if bulls are able to capitalize on the momentum or the positive move fizzles out at higher levels as the focus now shifts to this week's important US macro data, scheduled at the start of a new month.
The key focus will be on Friday's US monthly jobs report - popularly known as NFP, which tends to influence the market sentiment and might play an important role in determining the commodity's next leg of a directional move.
Technical levels to watch