Extending its bounce back from Thursday’s monthly low, Gold surged to erase all of its previous session losses and is now trading at a fresh session peak level at $1327.
A broadly weaker US Dollar is extending support to dollar-denominated commodities - like gold. Adding to this, the yellow metal also seems to benefit from downbeat sentiment surrounding European equity markets, which is boosting demand for traditional safe-haven assets.
Further upside, however, is likely to be restricted as traders might remain cautious ahead of the much talked about Fed Chair Janet Yellen's speech at Jackson Hole symposium, where fresh hint of an eventual Fed rate-hike sooner-than-expected could weigh heavily on gold prices.
Also in focus would be the first revision of US GDP growth for second quarter of 2016 and could provide some immediate momentum play for short-term traders.
Technical levels to watch
From current levels, important support break-point near $1330-32 region, coinciding with 50-day SMA, is likely to restrict immediate upside. Any further up-move beyond this immediate resistance is likely to be capped at $1338-40 area, above which any near-term bearish bias gets negated and the metal could resume its previous bullish momentum,
Meanwhile on the downside, $1317-15 region remains immediate support to defend, which if broken should turn the commodity vulnerable to break through $1305-1300 strong support and head towards testing 100-day SMA support near $1290-92 region.
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