Gold price recovers early lost ground, turns neutral around $1335 level

London (Apr 10)  Gold reversed an early dip to $1331 level and moved back to the top end of its daily trading range, albeit lacked any follow-through momentum.

A modest US Dollar rebound prompted some initial weakness around during the Asian session on Tuesday. Early optimism, led by Chinese President Xi Jinping's comments, quickly faded in light of a Bloomberg report, saying that the US-China trade talks have stalled over the high-tech industry, and helped the precious metal to bounce off lows.

Further gains, however, remained capped amid a follow-through upsurge in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal. This coupled with a fresh wave of global risk-on trade, as depicted by strong gains across equity markets, further dented the commodity's safe-haven appeal and collaborated towards keeping a lid on any additional up-move.

Traders now look forward to the latest PPI figures, which along with Wednesday's consumer inflation figures and the latest FOMC meeting minutes, might influence Fed rate hike expectations and eventually provide some fresh directional impetus.

Technical levels to watch

Any subsequent up-move is likely to confront immediate resistance near the $1340-41 region, above which the metal seems all set to head towards $1347 level en-route $1350-52 strong barrier. On the flip side, $1331-30 area now seems to have emerged as an immediate support, which if broken could accelerate the fall back towards $1326 level ahead of $1321-20 support zone.

FXstreet

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