Gold extends post-NFP recovery, rises to over 1-week high

Gold edged higher for the third consecutive session on Tuesday and is currently placed at over one-week highs, around the $1287-88 region. 

The precious metal extended its post-NFP recovery move from two-month lows and appeared to get a safe-haven boost from renewed geopolitical uncertainty. The US President Donald Trump’s tweets over the weekend sparked fears of a possible military action against N. Korea and underpinned demand for the perceived haven asset, including gold. 

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Adding to this, the US Dollar sluggishness further benefitted dollar-denominated commodities and aided the yellow metal's up-move through Asian session on Tuesday. 

It, however, remains to be seen if the commodity is able to sustain the recovery momentum amid growing expectations that the Fed would hike rates for the third time this year. A rising interest rate environment lifts Treasury bond yields and tends to drive flows away from the non-yielding bullion.

In absence of any major market moving economic releases from the US, broader market risk sentiment and the USD price dynamics would remain key determinants of the metal's movement ahead of Wednesday's FOMC meeting minutes.

Technical levels to watch

A follow through buying interest beyond $1290 level has the potential to lift the metal back closer to $1300 handle, above which a bout of short-covering could extend the recovery trend towards its next major hurdle near the $1310-11 region.

On the flip side, $1282-81 area now seems to protect immediate downside, which if broken could drag the commodity back towards 100-day SMA support near the $1273 region en-route $1267 important horizontal support.