Gold surges to over two-week tops as USD tumbles

Having posted a session low near $1227 level, gold turned positive for the fifth consecutive day and surged to its highest level since early March. 

Currently trading around $1241 level, the precious metal reversed course during early European session and accelerate the up-move during early NA session. 

Against the backdrop of perceived less hawkish Fed monetary policy outlook, a broad based greenback sell-off has been a key factor driving the precious metal. In fact, the key US Dollar Index extended the post-FOMC downslide to the weakest level since February 3 and is supporting demand for dollar-denominated commodities - like gold. 

US Dollar tumbles to 99.50, 7-week lows

Traders also seemed to have ignored a fresh wave of global risk-on trade, which tends to weigh on traditional safe-haven assets, including gold, with the US Dollar price-dynamics being an exclusive driver of the metal's strong up-surge. 

US stock edge up at open, Nasdaq hits fresh record highs

Investors on Tuesday will keep a close eye on speeches by Kansas City Fed's Esther George and Cleveland Fed's Loretta Mester for fresh clues over the Federal Reserve's near-term monetary policy outlook and provide some fresh impetus for the non-yielding yellow metal.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes, “now the thing is...It has also Double Topped at 1235...and we have said all along 1236 is the level we need to break...so for me I am now a bit wary of Gold...especially as I think that the daily charts are overextended and in need of a bit more corrective pressure...Only if we clear 1236 and stay there do we have enough momentum t break higher for 1244 and 1255...”

“If we fail to hold 1226 then we are coming back to the 1216 support.. We know this acted as good resistance on the way up...and a 20$ move might well be enough to ease back the overbought scenario...Now we haven't yet turned bearish on Gold...but the RSI has turned lower...and we are getting signals that perhaps all is not well....”