Gold extends the rise beyond $ 1300 amid risk-off, weaker USD

• Libyan geopolitical tensions lift safe-haven bids for gold.
• Upside further boosted by weaker Treasury yields, US dollar.
• Focus on risk trends, USD dynamics ahead of US factory orders, Fed minutes.

Gold (futures on Comex) extended its Asian advance and hit fresh one-week tops at 1302.05, as the overall market sentiment turned sour following the latest comments by the US Secretary of  State Pompeo, urging the Libyan National Army to stop its offensive on the capital, Tripoli.

The US intervention and the UN’s restraint on the Libyan geopolitical tensions intensified risk-off moods, boosting the safe-haven demand for gold at the expense of the risk assets such as equities, Treasury yields, etc.

Further, falling Treasury yields and US equity futures dragged the greenback lower across the board, collaborating to the upside in the yellow metal. More so, a round of profit-taking cannot be ignored in the US dollar following Friday’s sharp rally triggered by a bigger-than-expected increase in the US payrolls. However, markets continue to weigh in a slowdown in wage growth and job cuts in the manufacturing sector.  Meanwhile, fading optimism over the US-China trade talks also remains gold supportive.

Looking ahead it remains to be seen if the precious metal can extend the recent bullish momentum heading into the minutes of the FOMC March meeting due later this week, as speculators slashed their bullish wagers in COMEX gold in the week to April 2, the latest US Commodity Futures Trading Commission (CFTC) report showed on Friday.

In the meantime, the prices will continue to get influenced by the risk-off action on the global stocks and USD price-action, with the US factory orders next in focus.

Gold Technical Levels