Gold clings to gains near $1260 level on weaker USD
|Gold stalled the post-NFP slide and regained traction on Tuesday, now holding near session tops around $1260 region during the early European session.
A weaker greenback, with the key US Dollar Index languishing around 15-month lows, was seen benefitting dollar-denominated commodities - like gold. Overnight, the greenback came under some fresh selling pressure, following dovish comments from Fed's Kashkari and Bullard, and helped the precious metal to rebound from the vicinity of 100-day SMA immediate support.
Meanwhile, a fresh wave of global risk aversion trade, which tends to support demand for traditional safe-haven assets, provided an additional boost and remained supportive of the precious metal's up-move through early European trading session on Tuesday.
With today's up-move, the metal has now recovered part of Friday's sharp losses, led by stronger US jobs report, to near two-week lows and now look forward to the US inflation numbers for fresh hints on the Federal Reserve's pace of monetary tightening, which should provide some directional clarity for the non-yielding metal.
• Little evidence that Fed's tightening has had material impact - BBH
Technical levels to watch
A follow through up-move beyond $1262-63 area could lift the metal beyond $1266 intermediate resistance towards $1269-70 strong horizontal hurdle en-route multi-week highs resistance near the $1275 region.
On the flip side, weakness back below $1257 level might continue to find some buying interest near 100-day SMA support, currently near $1253 region. A convincing break below the mentioned support would turn the commodity vulnerable to break below $1250 level and head towards testing its next support near the $1244-43 region.
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