Gold bulls attempt to rebound from $1,310/oz

• The Iranian nuclear deal and the US-China trade tensions keep the yellow metal supported.
• The US Dollar long trade might see more profit-taking and favor gold bulls.

Gold is trading at around $1,313.18 a troy ounce down 0.11% on Monday as gold buyers are trying to find an intraday floor from which to rebound and target 1,318 which is the next key resistance to the upside. 

On the geopolitical front, the Iranian nuclear deal and the US-China trade tensions are supporting gold demand as a safe-haven.

The US Dollar Index (DXY), which measures the greenback relative to a basket of currencies is now slightly retreating from a triple top attempt by the bears on the four-hour chart. In the last three sessions, DXY traded sideways as market participants are taking profits on their USD long positions, however, the USD bull trend remains bullish. Gold is generally inversely correlated to DXY.

Earlier in the European session, gold was offered and tested the 1,310 level on the back of USD demand as market participants are expecting the Federal Reserve to hike rates at least three times in 2018. 

The next event which can affect USD and potentially gold is Powell’s speech on Tuesday. The US Federal Reserve Bank chairman Jerome Powell speak at the vent organized by the National Bank of Switzerland in Zurich.

Last week, the yellow metal recently tested yearly lows near the 1,300 level as investors turned to cash amid rising bond yields and the prospects of higher interest rates in the United States.

Gold 4-hour chart

The short-term trend is neutral. Resistance is seen at 1,318 supply level and at 1,326 swing high while support is seen at the 1,310 demand level and 1,301.50 cyclical low