• USD inches down and helps regain traction.
• Weaker bond yields supportive of the up-move.
• US monetary policy outlook eyed for fresh impetus.
Gold prices edged up at the start of a new trading week and recovered around 50% of last week's losses of more than 1%, buoyed by a weaker greenback.
Currently trading around the $1339-40 region, testing session tops, a fresh wave of US Dollar selling pressure was seen benefitting dollar-denominated commodities - like gold. The renewed buying interest was backed by weakness in the US Treasury bond yields, which tends to boost demand for the non-yielding yellow metal.
Meanwhile, the prevalent risk-on mood, as depicted by strong gains across global equity markets, did little to underpin the precious metal's safe-haven demand, albeit failed to stall the bullish momentum through the early European session.
It would now be interesting to see if the commodity is able to sustain/build on the bullish momentum as investors now look forward to the Fed Chairman Jerome Powell's first congressional testimony on Tuesday for fresh clues over the pace of monetary policy tightening cycle, which would eventually help determine the next leg of directional move.
Technical levels to watch
Immediate resistance is pegged near $1346-47 area, above which the commodity seems to move past $1353-54 supply zone and head back towards retesting $1358-60 strong resistance.
On the flip side, the $1338-37 region now seems to protect the immediate downside, which if broken might prompt some fresh selling and drag the metal back towards $1326 intermediate support en-route $1320 level.
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