Gold edges higher as USD slips, US tax bill in focus
• Holds within a 3-week old trading range.
• Gains some positive traction on weaker USD.
• A modest pickup in safe-haven demand underpinning.
Gold traded with minor gains through the early European session on Wednesday, albeit remained capped below $1280 level.
News reports that implementation of a major corporate tax cut under a crucial US tax reform plan could be delayed by a year interrupted strong US Dollar rally and benefitted dollar-denominated commodities - like gold.
Adding to this, a brief pause in the recent rally in equity markets and a sharp retracement in crude oil prices, pointing to a slight deterioration in investors' risk appetite, was further seen underpinning the precious metal's safe-haven appeal.
It, however, remains to be seen if the early uptick is sustainable or is being sold into amid growing expectations for a December Fed rate hike move, which tends to dent demand for the non-yielding yellow metal.
Looking at the broader picture, the commodity remains within a 3-week old trading range and hence, it would be prudent to wait for a decisive break before determining the next of directional move.
Technical levels to watch
A follow-through momentum above $1280 level could get extended towards $1284 heavy supply zone, which if cleared might trigger a short-covering bounce towards the $1290 region ahead of $1295 horizontal level.
On the flip side, retracement back below $1274-72 immediate support would reinforce the near-term trading range and drag the metal back towards $1269 intermediate support en-route the $1265 region.