Gold surrenders early gains to 2-week tops, weighed down by stronger USD recovery
|Gold surrendered majority of its early gains to two-week tops and refreshed session lows post-US economic data.
Today's better-than-expected US economic data - weekly jobless claims and PPI figures, provided an additional boost to the US Dollar's recovery move from 2-week lows and weighed on dollar-denominated commodities - like gold.
• US: Weekly initial claims was 243,000, a decrease of 15,000 from previous week
Meanwhile, a sharp upsurge in PPI, rising at the fastest pace since Feb 2012, helped the US Treasury bond yields to pare some of the post-FOMC steep losses and further drove flows away from the non-yielding yellow metal.
However, the prevalent cautious environment, as depicted by a weaker trading sentiment around equity markets, underpinned the precious metal's safe-haven demand and helped limit deeper losses, at least for the time being.
Next in focus would be speeches by Fed Governors Lael Brainard and Jerome Powell, which along with ECB President Mario Draghi could infuse some volatility in the market and provide some impetus to the commodity.
Technical levels to watch
A follow through retracement below $1290 level, leading to a subsequent break below $1287 horizontal support, could turn the metal vulnerable to head back towards testing $1281-80 support area.
On the upside, bulls would be eyeing for a clear break through $1300 psychological mark hurdle, above which the commodity is likely to dart towards $1308-09 strong horizontal resistance.
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