Gold clears 200-DMA hurdle, surges to 1-month tops

   •  The latest leg of sharp upsurge was fueled by ECB-led volatility in the markets.
   •  Traders shrugged off a strong pickup in the USD demand and upbeat US macro data.

Gold continued gaining positive traction through the mid-European session and surged to one-month tops in the last hour.

The European Central Bank detailed plans to slowly unwind its bond-buying program while also indicating it will hold rates at historic lows at least until the summer of 2019. German bond yields sunk in reaction to the dovish interest rate outlook and eventually benefitted the non-yielding yellow metal.

Traders shrugged off the prevalent positive trading sentiment around European equity markets, which tends to dampen demand for traditional safe-haven assets, with the bond yield dynamics acting as an exclusive driver of the precious metal's strong upsurge to the highest level since mid-May.

The momentum extended beyond the very important 200-day SMA, albeit a sudden pickup in the US Dollar demand, primarily led by the ECB-led sell-off in the shared currency and further supported by better-than-expected US monthly retail sales data, now seemed to keep a lid on any additional gains for the dollar-denominated commodity.

Technical levels to watch

Immediate resistance is pegged near $1314 area, above which the metal could aim towards challenging the $1322-23 supply zone. On the flip side, any meaningful retracement is likely to find immediate support near the $1300 handle and any subsequent fall now seems limited by support near the $1296 region.