• Easing geopolitical tensions prompt some fresh selling on Tuesday. • A modest uptick in the US bond yields adds to the downward pressure. • Traders eye US CPI for some impetus ahead of Wednesday’s FOMC decision.
Gold held on to its mildly weaker tone through the mid-European session on Tuesday and is currently placed at the lower end of its daily trading range, around the $1297-98 region.
A positive outcome from the closely watched summit between the US President Donald Trump and North Korean leader Kim Jong Un, pointing to a de-escalation of geopolitical tension, prompted some fresh selling around traditional safe-haven assets, including gold.
This coupled with a modest uptick in the US Treasury bond yields exerted some additional downward pressure on the non-yielding yellow metal and further collaborated to the ongoing retracement from near three-week-old descending trend-line resistance.
Investors now look forward to the release of latest US consumer inflation figures, which might influence the US Dollar price dynamics and eventually derive demand for dollar-denominated commodities - like gold.
The key focus, however, would remain on the latest FOMC monetary policy update, due to be announced on Wednesday, which would help determine the next leg of directional move.
Technical levels to watch
Immediate support is pegged near the $1294-93 region, below which the metal is likely to head towards testing $1287-85 intermediate zone en-route $1282 level - YTD lows touched on May 21st.
On the flip side, any meaningful up-move beyond the $1300 mark is likely to confront fresh supply and remain capped near the very important 200-day SMA, currently near the $1307-08 region.
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