Gold pushes higher after Oil plummets

• Gold rises after Oil prices cascade due to Israel's decision not to target Iranian Oil facilities in its recent bombing raid. 
• Cheaper Oil is likely to keep global inflation capped, leading to lower interest rates, which is positive for Gold.  
• XAU/USD trades up to the top of a mini range, consolidating within a longer-term bullish trend.  

Gold (XAU/USD) pushes higher into the $2,750s on Tuesday, at the top of the previous week's mini range. The precious metal gains a backwind from falling Oil prices,  which declined 6.0% (Brent) on Monday due to the news that Israel only attacked military targets in Iran, leaving its Oil and nuclear installations unaffected. 

Cheaper Oil is likely to help maintain lower levels of inflation globally as it reduces fuel and energy costs - a major factor in production, transportation and heating. This, in turn, is likely to accelerate the downward progression of global interest rates, boosting Gold's attractiveness to investors as a non-interest-paying asset. 

Gold also remains underpinned by safe-haven flows due to the ongoing conflict in the Middle East and the escalation of the war in Ukraine following the news that North Korea has sent troops to Russia. 

Gold rally could face resistance on bond rout, US Dollar strength

Despite the overall positive outlook, Gold could face limited upside due to rising US Treasury bond yields, as markets price in the increased risk of former president Donald Trump winning the US presidential election. 

A soft US bond auction as well as the general view that Trump's lower tax and spend policies will raise inflation and increase US borrowing is leading investors to offload their US Treasury bond holdings. 

The US 10-year Treasury Note yield is up over half a percent at 4.302%, the 5-year is up a similar amount at 4.132% and the 3-month T-bill is up 0.35% at 4.618%. 

Rising yields are having the effect of strengthening the US Dollar (USD), to which they are correlated. This could cap gains for the precious metal as Gold is mostly priced and traded in USD. 

Technical Analysis: Gold tests top of range

Gold has reached the top of its mini range, which stretches from a low of $2,708 to the all-time high at $2,758.  

Overall, the yellow metal is in a steady uptrend on all time frames (short, medium and long), which, given the technical principle that "the trend is your friend," tilts the odds in favor of more upside. 

XAU/USD Daily Chart

A break above the top of the range at $2,758 would help confirm a continuation up to the next big-figure target level, which lies at $3,000 (round number and psychological level).