Gold prices edged higher on Wednesday after a pullback yesterday, but gains were limited due to the increased risk appetite among market participants.
The yellow metal was last trading $1,333 per troy ounce, up $1.60.
“I believe gold is still glowing, despite the return of risk appetite, with further upside on the cards as heightened political uncertainty in Washington and geological concerns support the flight to safety,” Lukman Otunuga, research analyst at FXTM, said.
From a technical standpoint, gold bulls are still in the game, despite the nasty drop from over the weekend. A breakout above $1340 should encourage a further appreciation higher towards $1350, he said.
“In an alternative scenario, a breakdown and repeated weakness under $1325 is likely to encourage a decline towards $1315 and $1300, respectively.”
Exchange trade funds investors remained loyal to the metal, taking advantage of the lower prices to purchase, causing gold ETF inflows to reach 4.4 tons yesterday.