• Pessimism over global growth hits risk sentiment and underpin demand for safe-haven assets. • Sliding US bond yields offset a modest USD uptick and remained supportive of the up-move.
Gold staged a goodish rebound from closer to over two-week lows, set in the previous session, and for now seems to have snapped three consecutive days of losing streak.
Pessimism over global growth grew after the International Monetary Fund lowered its 2019 and 2020 global growth forecasts on Monday and said failure to resolve trade tensions could further destabilize a slowing global economy.
The downgrade came after China reported its slowest quarterly economic growth since 2009, also the weakest annual growth rate since 1990, and dented global risk-appetite, which was eventually seen underpinning the precious metal's safe-haven demand.
The global flight to safety was evident from a weaker sentiment around equity markets and declining US Treasury bond yields, which partly offset a modest US Dollar uptick and provided an additional boost to the non-yielding yellow metal.
There isn’t any major market-moving economic data due for release from the US and hence, the broader market risk sentiment might continue to act as an exclusive driver of the commodity’s move through Tuesday trading session.
Technical levels to watch
Immediate resistance is pegged near the $1286 area, above which the positive momentum could further get extended towards $1290 intermediate hurdle en-route the $1294-95 supply zone. On the flip side, $1280 level now seems to protect the immediate downside, which if broken might turn the commodity vulnerable to retest $1277-76 horizontal support before eventually falling to the $1270-69 region.
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