Gold retreats from multi-year tops, steadies below $1600 mark
- Gold rallied to multi-year tops amid intensifying US-Iran tensions.
- Easing concerns prompted traders to take some profits off the table.
Gold trimmed a part of its early strong gains to near six-year tops and now seems to have stabilized below the $1600 round figure mark.
The safe-haven precious metal added to its recent gains and rallied to the highest level since March 2013 during the Asian session on Wednesday amid intensifying geopolitical tensions in the Middle East.
US-Iran standoff supportive for gold
The move followed news that Iran – in retaliation to the US drone strike last week – fired more than a dozen ballistic missiles on US-led forces in Iraq, escalating tensions between the US and Iran.
The global flight to safety was further reinforced by a sharp fall in the US Treasury bond yields, which further benefitted the non-yielding yellow metal and played its part fueling the strong positive move.
Following the strikes, Iranian Foreign Minister Javad Zarif said that Iran does not seek an escalation of the war. This coupled with the US President Donald Trump's refrained response helped ease concerns.
As the markets turned calm, traders opted to take some profits off the table amid extremely overbought conditions and look forward to Trump's statement later during the day before placing fresh bets.
Apart from the US-Iran standoff, traders on Wednesday will further take cues from the release of US ADP report on private-sector employment, which might influence the US dollar price dynamics and produce some short-term opportunities.
Technical levels to watch