Gold eases from tops, but remains on track to post strong weekly gains
| • A goodish USD rebound prompts some profit-taking.
• Risk-on mood adds to the downward pressure.
• US economic data eyed for some fresh trading impetus.
Gold surrendered a major part of its early gains to 3-week tops and has now retreated to $1355 level ahead of the US economic data.
A goodish US Dollar rebound from near-term oversold conditions, despite a subdued action surrounding the US Treasury bond yields, seems to have prompted some profit-taking, especially after a strong rally of over 3% from weekly lows touched on Tuesday.
This coupled with some strong across European equity markets dented demand for traditional safe-haven assets and further collaborated to the precious metal's retracement from closer to January's 17-month highs.
Despite a modest pull-back, the commodity remains on track to post strong weekly gains, for the first time in the previous three, and could also be headed for its highest weekly close since early July 2016.
Traders now look forward to the US economic docket, which might influence the USD price dynamics and eventually provide some impetus to the dollar-denominated commodity.
Technical levels to watch
Any subsequent weakness is likely to find some support near the $1352 level, which is closely followed by support near $1348 area. Sustained weakness below the mentioned support might prompt some additional long-unwinding trade and drag the commodity further towards $1340 support zone.
On the flip side, momentum beyond the $1361-62 region is likely to get extended towards $1366 level (January high), above which the metal seems all set to aim towards testing $1370-75 supply zone, also coinciding with highs set in June 2016.
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