Gold sits at three week tops, just below $1250
|Gold extended its recent steady up-move and is currently placed at three-week tops near $1246-47 region, on track for second consecutive weekly gains.
Persistent greenback selling bias, with the key US Dollar Index sinking to fresh multi-month lows below the 94.00 handle has been one of the key factors benefitting dollar-denominated commodities - like gold.
• US Dollar under pressure around 94.00
This coupled with growing political concerns, led by investigations into the US President Donald Trump’s campaign ties with Russia, and a fresh wave of global risk aversion trade also extended support to yellow metal's safe-haven appeal.
Meanwhile, the ECB's governing council on Thursday unanimously decided not to change the forward guidance and did not discuss reducing the central bank's stimulus program. Hence, the ongoing slide in global Treasury bond yields was also seen driving flows towards the non-yielding metal.
• ECB Review: QE path not defined but slower purchases coming – Danske Bank
Even from a technical perspective, a sharp recovery from the key $1200 psychological mark support, and a subsequent move back above the very important 200-day SMA hurdle near the $1230 region clearly suggest that the commodity might continue moving north in the near-term.
Technical levels to watch
Currently flirting with 100-day SMA hurdle, a follow through buying interest is likely to pave way for extension of the near-term upwards trajectory towards $1257-58 important horizontal resistance. The momentum could further get extended towards its next major hurdle near $1266 level.
On the flip side, retracement below $1244-43 area now seems to find immediate support near $1240 level, which if broken could trigger a corrective slide towards $1235 intermediate support en-route 200-day SMA support near $1230 region.
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