Gold prices remained under pressure on Tuesday as the risk sentiment has resurfaced after weekend events appeared to be less catastrophic than initially estimated.
Sentiment continued to improve as Hurricane Irma caused less damage than expected in Florida and as North Korea did not fire missiles over the weekend.
Market participants had braced for additional provocations from North Korea on September 9, as the State celebrated its founding day. But Pyongyang marked the anniversary without further missile or nuclear tests.
In response to North Korea’s sixth nuclear test, the U.N. Security Council voted unanimously on Monday to step up sanctions on the peninsula. Its textile exports are now banned and fuel supplies to Pyongyang are capped.
It was the ninth sanctions resolution unanimously adopted by the Security Council since 2006 over North Korea’s ballistic missile and nuclear programs.
On the other hand, Hurricane Irma continued to hammer Florida on Monday, but it lost strength and was downgraded to a tropical storm.
Gold trades in a downward trend line according to the chart.
If there is a continuation of the bearish momentum, the commodity could break down below 1321 and possibly extend more losses toward 1316.
In the case of a bullish scenario, gold could climb toward the 1332 and extend gains through 1338