Although Gold witnessed a tepid rebound amid risk-off mood on Monday, it has been confined within a short-term trading range around $1250 level.
Currently trading around $1254 level, Monday's recovery has been primarily supported by a slight deterioration in investor risk-appetite as depicted by offered tone surrounding the USD/JPY major. Moreover, a slide in the US longer-term (30-years) Treasury bond yields and the broader US equity index (S&) 500) is further supportive of the prevalent risk-aversion sentiment in the market.
It is worth noticing that despite of the recent strength in the greenback, on increasing prospects of an eventual Fed rate-hike action by the end of 2016 and which tends to dent demand for dollar-denominated commodities – like gold, the yellow metal has been consolidating its recent slide within a narrow trading band, albeit below the very important 200-day SMA.
Hence, any further deterioration in investors' appetite for riskier assets would benefit the precious metal's safe-haven appeal and could trigger a short-covering bounce. However, revival in investor appetite and renewed US Dollar strength would weigh heavily on the metal and would pave way for continuation of the near-term depreciating move.