Gold prices hit a two-week high yesterday, but trimmed intraday gains afterwards. The yellow metal touched levels marginally below the $1,266 figure and closed below $1,260. On Tuesday, gold has been trading just above $1,255, with a mild bearish bias.
The precious metal gained last week due to dollar weakness which continues these days. The cautious investor tone amid Brexit uncertainty and trade war jitters give only a marginal support to the metal as its safe haven status has been eroding lately. Despite the overall technical picture has improved recently, gold remains vulnerable to fresh losses in the short term.
The dollar dynamics remains the key driver for the bullion. As the pressure on the greenback has been easing today, the short-term outlook for gold looks cloudy at this stage. The price needs to get back firmly above the $1,260 area to regain the upside impetus, while the key on the upside is the $1,266 level. On a weekly basis, US CPI data due on Thursday could fuel gold demand should the numbers disappoint the USD bulls.