Gold recovers from 4-week lows amid renewed N. Korea tensions
|Gold gained some positive traction on Friday and recovered part of previous session's slump to four-week lows.
Currently trading around $1297 level, the precious metal was seen benefitting from global flight to safety after the latest twist in tension between the US and N. Korea.
The US President Donald Trump ordered more sanctions against North Korea on Thursday. N. Korea retaliated by saying that the country would consider another hydrogen bomb test in the Pacific Ocean and triggered a fresh wave of global risk aversion trade on Friday.
• N. Korea’s Ri: ‘It could be the most powerful detonation of an Hydrogen bomb in Pacific’
This coupled with weaker sentiment around the US Dollar further underpinned the demand for dollar-denominated commodities and collaborted to the metal's recovery move through early European session on the last trading day of the week.
• US Dollar hovering over 91.80, session lows
Despite of the modest recovery, prices remained below $1300 mark as the latest hawkish Fed views kept a lid on any strong up-move for the non-yielding yellow metal.
• FOMC: What we got from the September meeting? – Deutsche Bank
The commodity remains at the mercy of broader market risk sentiment, which tends to drive demand for traditional safe-haven assets. Nevertheless, the commodity remains track to post its second weekly decline and its lowest weekly close in four weeks.
Technical levels to watch
The recovery move is likely to confront immediate resistance near the $1300-01 region, above which a bout of short-covering could lift the metal towards $1306 level en-route $1311 hurdle.
On the flip side, $1290 level now seems to protect immediate downside, which if broken is likely to accelerate the slide towards $1284-83 support ahead of $1280 level.
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