Gold consolidates gains after renewing multi-week highs near $1,736
|- Risk-off environment helped gold find demand on Thursday.
- USD strength keeps XAU/USD pair's upside limited in American session.
- A technical break out seems to have provided an additional boost to gold.
The XAU/USD pair rose for the third straight on Thursday and touched its highest level since April 24th at $1,736.47 during the early American session. Following the impressive rally, the pair has gone into a consolidation phase and was last seen gaining 0.83% on the day at $1,730.70.
Gold breaks out of its range
Earlier today, heightened US-China tensions and the poor performance of major European equity indexes boosted the demand for safe-haven assets such as gold. Additionally, the fact that XAU/USD broke above the upper limit of its three-week-old channel near $1,720 seems to have triggered a fresh bullish-wave.
Meanwhile, the greenback also capitalized on the risk-off environment and outperformed its major rivals. The US Dollar Index (DXY)built on Wednesday's gains and advanced to a fresh multi-week top of 100.56 to cap XAU/USD upside. As of writing, the pair was up 0.3% on the day at 100.50.
Moreover, Wall Street's main indexes, which opened the day more than 1% lower, staged a rebound after President Trump said that they could have a vaccine ready by the end of the year. Recovering market sentiment made it difficult for the pair to push higher. At the moment, the S&P 500 is flat on the day while the Dow Jones Industrial Average is up 0.37%.
During the Asian session on Friday, market participants will be paying close attention to Industrial Production and Retail Sales data from China. If these data impact the risk perception, gold prices could react accordingly.
Technical levels to watch for
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