Gold jumps to session peak as USD retreats
|After an initial downward reaction to upbeat US GDP print, Gold managed to recover its lost ground and has now jumped to session high, making a fresh attempt to conquer the very important 200-day SMA.
Currently hovering around $1273, the precious metal caught fresh bids at lower level as the greenback, as measured by the overall US Dollar Index, lost seems to have lost its upside momentum despite of strong growth numbers for the third quarter of 2016. A weaker greenback tends to benefit dollar-denominated commodities - like gold.
The commodity's current leg of up-move could be attributed to short-covering ahead of the weekend as the metal has been showing strong resilience to break on the downside.
Further, however, might be limited given that the markets remain convinced that the Fed would eventually move towards raising interest-rates by the end of this year, with CME group's FedWatch Tool still pointing to over 70% probability of such an action in December.
From technical perspective, the yellow metal remained within weekly trading range, around 200-day SMA, and lacked a firm near-term direction. Hence, it would be prudent to wait for a confirmation before confirming the next leg of directional move for the commodity.
Technical levels to watch
Immediate upside resistance is pegged near $1275-76 region above which the metal seems to immediately dart towards $1282 horizontal resistance en-route its next major hurdle near $1300 psychological mark. On the downside, $1266-65 zone now becomes immediate support, which if broken might drag the metal back towards $1261-60 strong horizontal support.
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