Gold, along with other safe-haven assets, failed to receive a boost from a parliamentary vote in the UK where Theresa May suffered the worst defeatof a government in the history of the House of Commons. Now, investors bet on a ‘softer’ Brexit, which in turn supports high-yielding assets, while the Japanese yen and gold turned lower on Tuesday.
Today, the yellow metal makes some recovery attempts but the bullion obviously lacks the impetus at this stage as the current investor sentiment in the global financial markets looks neutral-to-positive. Besides, gold struggles to attract more buyers as the price has encountered a strong psychological resistance of $1.300 and struggles to overcome this barrier amid lack of catalysts.
All this makes traders suppose that the precious metal has reached a local top and will likely get down from the current levels in the short term. Fed’s Beige book due today could serve as a confirmation of forming a short-term top if the report shows that the central bank is not as pessimistic on the US economy as the markets are. Any signs of positive assessment could encourage dollar bulls at the expense of gold.
In this scenario, the bullion may challenge the intermediate support around $1,284 should investor sentiment remain relatively elevated. Otherwise, the metal will settle above the $1,290 level. In the longer gold could yet receive a boost against the backdrop of a number of global risks.