Gold price spikes to over 1-week tops amid global flight to safety

London (May 23)  After an initial downtick to sub-$1290 level, Gold caught some fresh bids and jumped to over one-week tops in the last hour.

Investors rushed to buy traditional safe-haven assets on Wednesday after the US President Donald Trump tempered optimism over the progress made in the recent US-China trade talks.

This coupled with resurfacing geopolitical tension amid doubt over the upcoming historic US-North Korea summit in June spoofed global financial markets and helped revive the precious metal's safe-haven demand.

The global risk-off mood was further evident from a sharp fall in the US Treasury bond yields, which provided an additional boost to the non-yielding yellow-metal and remained supportive of the uptick.

Meanwhile, resurgent US Dollar demand was seen as the only factor keeping a lid on any strong up-move for dollar-denominated commodities - like Gold, with bulls now seemed struggling to make it through the $1300 handle.

Moving ahead, today's release of the latest FOMC meeting minutes, due later during the NY trading session, might influence Fed rate hike expectations and provide some meaningful momentum that could assist the commodity to decisively breakthrough a multi-day trading range.

Technical levels to watch

A follow-through momentum beyond the $1300 level is likely to get extended and lift the metal back towards retesting the very important 200-day SMA barrier near the $1307 region.

On the flip side, retracement back below $1293 level might drag the commodity back towards $1288-86 support area, which if broken would turn it vulnerable to resume with the prior downward trajectory.

FXstreet

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