Uncertainty and geopolitical tensions surrounding how US President Trump might respond to North Korea has continued to dent market risk sentiment. Investors were spooked by weekend comments from President Trump when he suggested that years of negotiations with North Korea have proved futile.
Apart from North Korea, a weaker greenback is also lending support to bullion, but rising expectations that the Fed would lift interest rates again this year is weighing on momentum. Federal Funds futures are currently pricing in as much as an 88.00% likelihood of a US rate hike in December. Higher interest rates curb demand for the non-interest-bearing assets like dollar-denominated gold. XAUUSD was last seen around $1287.00, with $1290.00 an ounce represents the immediate resistance on the upside. A break above could see bullion prices rally all the way to $1300.00 an ounce.