Gold hits fresh multi-year tops, around $1460 area
- The global flight to safety continues to benefit the precious metal.
- A free-fall in the US bond yields/weaker USD remained supportive.
Gold prices edged higher through the early European session on Monday and climbed to fresh multi-year tops, around the $1459-60 region, in the last hour.
After a brief pause on Friday, the precious metal regained positive on the first day of a new trading week and built on last week's solid rebound from the $1400 neighbourhood - tested in reaction to a hawkish rate cut by the Fed. A sharp deterioration in the global risk sentiment, amid a fresh escalation in the US-China trade disputes, turned out to be one of the key factors benefitting the precious metal's perceive safe-haven status.
It is worth reporting that the US President Donald Trump on Thursday unexpectedly announced to slap 10% tariffs on additional $300 billion worth of Chinese imports from September 1 and rattled global financial markets. The global flight to safety was evident from the ongoing free-fall in the US Treasury bond yields, which underpinned demand for the non-yielding yellow metal and further collaborated to the latest leg of an upsurge.
Meanwhile, declining US bond yields continued prompting some follow-through US Dollar long-unwinding trade on Monday, which eventually provided an additional boost to the dollar-denominated commodity or did little to hinder the positive momentum to the highest level since May 2013.
With Monday’s strong upsurge, the commodity now seems to have confirmed a fresh bullish break through the $1445-48 horizontal resistance and hence, a follow-through up-move, possibly towards reclaiming the key $1500 psychological mark, now looks a distinct possibility.
Technical levels to watch