Gold prices extended recent losses to fresh late-January lows around $1,281, where the bullion received some support and finished marginally higher yesterday. On Wednesday, the precious metal continues timid recovery attempts despite the fact that the dollar remains strong after the data showed a rebound in US housing and services activity.
Geopolitical headlines seem to be underpinning safe-haven gold demand at the moment, as North Korea is reported to be restoring part of a missile test site it began dismantling earlier. On the other hand, investor optimism over the upcoming US-China trade deal still caps the appeal of the yellow metal.
Meanwhile, Goldman Sachs (NYSE:GS) remained positive on in its latest commodities report. The bank raised its forecast by $25 over the next three, six and twelve months to $1,350, $1,400 and $1,450 an ounce, respectively.
In the short term, the bullion needs to get back above the $1,300 threshold to regain the upside momentum. A daily close above this local resistance will improve the immediate technical outlook for the metal. But no strong rally is expected at the moment as risk-on sentiment still prevails in the financial markets and dollar demand remains robust.