By Barani Krishnan
Investing.com -- It’s taken exactly a month, but gold returned briefly on Tuesday where longs in the game longed it to be — the key $1,800 level.
The benchmark gold futures contract on New York’s Comex, December, reached a session high of $1,804.95 an ounce, before consolidating to trade at $1,798.20 by 10:12 AM ET (14:12 GMT),
The spot price of bullion remained below the $1,800 level, peaking at $1,788.12.
“The futures blew off some froth at the top, but the upside is still very much intact,” said Sunil Kumar Dixit, chief technical strategist at skcharting.com. “The game isn’t over until Comex gets to at least $1,830 or $1,835.”
It has taken some toiling for Comex gold to return to the psychologically-important bullish mark it was forced off on July 1, amid the meteoric rally in the dollar than on bets for higher-and-higher Federal Reserve rate hikes.
The Dollar Index, which pits the greenback against six other major currencies, struck a near three-week low of 104.92 on Tuesday, tumbling from a two-decade high of 109.14 on July 14.
U.S. bond yields, which had joined the dollar in pressuring gold earlier this month, also tumbled as the benchmark 10-year Treasury note hit a five-month low of 2.52%.
Comex gold’s pivot towards $1,800 came after Federal Reserve Chair Jerome Powell said last Wednesday that the central bank couldn’t predict if it’ll hold on to the aggressive rate hikes it had carried out since March to beat inflation.
The yellow metal gained more fervor after a reading on the second quarter US gross domestic product on Friday technically placed the U.S. economy in a recession.
The notion of recession and peaking Fed rate hikes sent gold up 2.2% last week for its best weekly performance since the week to Feb. 25.
Since then, gold has also been supported by safe-haven plays, triggered partly by US House Speaker Nancy Pelosi’s trip to Taiwan against the best wishes of China.