Maintaining its negative correlation with the greenback, Gold tipped lower during early part of the day. The precious metal, however, managed to recover its lost ground and is now extending its momentum to currently trade around $1350 region.
Today's release of weekly unemployment claims provide little assistance in evaluating the possibilities if the Fed will raise interest-rates later during this year and prompted a fresh bout of selling pressure around the US Dollar, which extended support to dollar-denominated commodities - like gold.
Apart from a broadly weaker greenback other intrinsic have failed to extend any support to recovery in gold prices. Continues drop in the Volatility Index (VIX) is supportive of risk-on rally and is contributing to the ongoing bullish momentum in the broader US equity index (S&P 500). Meanwhile, the USD/JPY pair and the US longer-term (30-years) Treasury bond yields were seen struggling for a firm direction and are not providing any fresh impetus to the yellow metal.
Bullion traders now turn their attention to Friday's monthly retail sales figures and consumer confidence data from the US, which would enable investors to reassess the likelihood of an eventual Fed rate-hike decision by the end of this year. A disappointing reading would attract fresh US Dollar selling pressure and boost demand for the precious metal.
Adding to this, Friday's Chinese economic data during early Asian session could also trigger a fresh bout of global volatility and drive investors to traditional safe-haven investment, which would further extend support to the ongoing momentum in gold prices.
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