Gold: bulls making a fresh attempt to build on momentum beyond 100-day EMA

   •  A subdued USD price action helps regain positive traction for the second straight session.
   •  A fresh wave of global risk-aversion trade further underpins the safe-haven demand.
   •  Gains remain capped below 2-1/2 month tops amid firming Fed rate hike expectations.

Gold quickly reversed an early European session dip to $1223 area and is currently placed at the top end of its daily trading range, just above 100-day EMA.

The US Dollar failed to build on/preserve early gains to fresh multi-week tops and was seen as one of the key factors underpinning the dollar-denominated commodity. This coupled with a fresh wave of global risk-aversion trade, as depicted by a weaker tone around equity markets boosted the precious metal's safe-haven appeal and remained supportive of the positive move.

It, however, remains to be seen if bulls are able to build on the momentum beyond 100-day EMA or the commodity continues with its struggle to sustain above the $1230 region. A hawkish assessment of the latest FOMC meeting minutes, reinforcing market expectations that the Fed might continue raising interest rates gradually, and beyond 2018, might turn out to be the only factor capping gains for the non-yielding yellow metal.

In absence of any major market moving economic releases, broader market risk sentiment and the USD price dynamics might continue to play important role in influence the momentum on the last trading day of the week. Nevertheless, the commodity remains on track to record its third consecutive weekly gains and possibly the highest weekly close since mid-July.

Technical levels to watch

On a sustained move beyond the $1230-33 supply zone, the commodity is likely to accelerate the up-move towards $1241 intermediate resistance en-route its next major hurdle near the $1250 region. On the flip side, the $1222 area, followed by the $1217-16 region now seems to protect the immediate downside, which if broken might negate prospects for any further up-move and turn the metal vulnerable to extend the slide towards the $1205 region with some intermediate support near $1210 level.