Gold rise to one-week high, looks set to continue rallying
Gold (XAU/USD) prices turned positive for the third straight day on Monday and rose to $2,667, or over a one-week high during the early European session on Monday. Expectations that the Federal Reserve (Fed) will continue to cut interest rates amid a favorable inflation outlook turned out to be a key factor driving flows towards the non-yielding yellow metal. Moreover, escalating geopolitical tensions in the Middle East provided additional support to the safe-haven bullion.
Meanwhile, US Treasury yields and the US Dollar (USD) remained elevated amid rising bets for less aggressive policy easing by the US central bank. This, along with a generally positive risk tone and optimism over China’s pledge to raise debt to revive its economy, might cap further upside for the safe-haven Gold prices. This, in turn, warrants caution for bullish traders and before positioning for any further appreciating move amid a partial holiday in the US.
Source : FXSyreet