Gold jumps to weekly high amid persistent USD weakness
|Gold gained fresh traction and traded with positive bias for the third consecutive session on Thursday, touching a fresh one-week high during early NA session.
Currently trading around $1239 level, continuation of the greenback's reversal move was seen supporting demand for dollar-denominated commodities - like gold. In fact, the key US Dollar Index, which touched 101.75 (the highest level since January 12 on Wednesday), was down around 0.4% for the day and was placed at daily lows near 100.70 region.
Moreover, the prevalent risk-off, as depicted by negative trading sentiment around equity markets, is further boosting demand for traditional safe-haven assets and collaborating to the metal's bid tone for the third consecutive session.
Next on tap would be the US economic docket, which would be looked upon for short-term trading opportunities during NA session.
Technical outlook
Yuri Papshev, an independent analyst notes, "positive dynamics of the XAU/USD pair is maintained above the level of 1208.00 (EMA200 on 4-hour chart). Fundamental factors (political uncertainty in Europe and the US, the low probability of a rate hike in the US in March) supporting the gold price. Growth may resume when attached above the nearest resistance level of 1235.00 to 1248.00 goals (Fibonacci level of 50%), 1255.00 (EMA200 on the weekly chart), 1276.00 (61.8% Fibonacci level)."
He further writes, "on the daily and 4-hour charts indicators OsMA and Stochastic crossed over to the sellers. Breakdown level of 1225.00 could trigger a further decline in XAU/USD pair. The immediate objective are - the level of 1220.00 (38.2% Fibonacci level of the correction to the wave decline from July 2016). Breakdown level of 1220.00 could trigger a further decline in XAU/USD pair back to the descending channel on the daily chart and a further decline in this channel."
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