COMEX gold trades in a narrow range near $1285/oz as support from weaker outlook for US dollar is countered by improved risk sentiment.
Gold tested $1300/oz last week for the first time since June 2018 however failure to sustain above that level has resulted in some correction.
Gold and other safe haven assets came under pressure amid sharp recovery in US and global equity market. US DJIA index has recovered almost 10% from the lows set in December. Risk sentiment has improved amid progress in US-China trade talks, Fed's patient stance on interest rate hikes and China's move to cut reserve requirement rate to support economy.
However, supporting gold price is weaker outlook for US dollar amid mixed economic data and Fed's cautious tone on US economy and patient stance on rate hikes. Further cues will come from FOMC minutes due later today.
While US-China trade talks are progressing, there is skepticism that there will be a major breakthrough in the near term. Market concerns are also high about US government shutdown which entered 18th day Tuesday. Concerns also persist about Brexit ahead of an expected vote in British Parliament in the week starting January 14.