The yellow metal continues its recovery on Tuesday amid a widespread risk aversion, declining yields and weaker dollar. Gold prices are regaining ground for a sixth day in a row but still fail to make a decisive break above the $1,225 immediate resistance.
Investors refrain from risk taking against the backdrop of ongoing Brexit concerns, Italy’s budget issues, uncertainty over the trade war, and the global growth concerns. Additionally, the greenback is on the back-foot after some dovish comments by Fed officials. These two factors support the metal’s attractiveness for buyers.
However, the current pressure on the buck is not enough to fuel a more sustainable ascent in gold prices. Investors are still cautious after a prolonged drop that lasted for over six months. Gold bulls need more impetus and drivers to push the prices substantially higher from here.
As such, the precious metal will continue to closely watch the signals from dollar and from the Fed, while the incoming US economic data will be assessed by traders even more thoroughly after the recent signals from the Federal Reserve. The bullion needs to get back above the $1,230 threshold in order to pave the way to further ascent.