Gold inter-markets: all set to continue with its near-term upward trajectory

After an initial downslide to $1230 level, Gold regained traction and touched a fresh three month peak amid uncertain environment. 

Currently trading around $1236 region, the precious metal ignored the ongoing US Dollar recovery and continued gaining traction in wake of political instability in Europe and persistent uncertainty about President Donald Trump’s policies. A fresh wave of downslide in the longer-term US Treasury bond yields (10 & 30-years) is indicative of the prevalent nervousness in the market and supported the metal’s up-move during mid-European session. 

Recent slide in the US Treasury bond yields are also pointing towards diming possibilities of additional Fed rate-hike action in the near-term. In fact the CME Group's FedWatch Tool suggests over 90% probability of no rate-hike action at the Fed's next monetary policy meeting in March, thus lowering the opportunity cost of holding the non-yielding bullion and limiting any immediate downside prospects.

In addition to this, Trump-led rally in the US stock markets also seemed to have slowed, as investors turn skittish, which eventually is extending additional support to the yellow metal's safe-haven appeal and collaborating to the recent up-move.

With a strong degree of correlation with the US Treasury bond yields, the metal seems all set to extend its recent bullish trajectory. Only intrinsic that might hinder the bullish run is ongoing recovery around greenback, which tends to weigh on dollar-denominated commodities –like gold.