Gold remains close to three-week high; modest USD uptick seems to cap gains
Gold (XAU/USD) sticks to modest intraday gains through the early European session and currently trades just below a nearly three-week high touched this Tuesday.
Worries about the potential economic fallout from the longest-ever US government shutdown turned out to be a key factor that continues to underpin demand for the safe-haven commodity. This, along with expectations for another rate cut by the US Federal Reserve (Fed) in December, further acts as a tailwind for the non-yielding yellow metal.
Meanwhile, a positive development towards reopening the US government provides an additional boost to the already upbeat market mood.
Apart from this, the emergence of some US Dollar (USD) buying is holding back traders from placing aggressive bullish bets around the XAU/USD pair amid relatively thin trading volumes on the back of a bank holiday in the US.
However, dovish Fed expectations could limit further USD gains and suggest that the path of least resistance for the Gold price is to the upside.
Source : Fxstreet.com