Gold prices extend gains for a third day in a row after a rejection from more than one-month highs last week. The bullion has been making bullish attempts below $1,480, with upside bias persisting despite risk sentiment improved on Tuesday after fresh all-time highs in Wall Street overnight. Still lack of safe-haven demand prevents the precious metal from making more sustainable gains.
Global investors continue to cheer the US-China consensus on the phase-one deal and now expect the two countries to sign the preliminary agreement. However, the current market optimism could wane if the official deal doesn’t come in the short term, which could play into the hands of gold market investors. Also, investors express a more cautious tone early in Europe amid the revived no-deal Brexit concerns after an optimism following the Conservative Party’s victory in the UK election. market fears reemerged on the comments from Prime Minister Boris Johnson who said he is looking to block any extension following the December 31 2020 deadline.
In the short term, gold could stay elevated but the upside momentum will likely remain limited as long as risk-on sentiment prevails. Later in the day, economic updates out of the United States could affect the sentiment in gold market, and the disappointing figures may support the yellow metal at the expense of a weaker dollar. The immediate resistance comes around $1,480, while the next barrier comes in the form of the 100-DMA at $1,490.