Gold climbs to fresh 1-year high on renewed USD weakness

Haresh Menghani FXStreet

Gold continued gaining traction on Friday and moved past $1350 level to hit fresh one-year high during early European session, albeit retreated a bit thereafter.

Against the backdrop of post-ECB rally in the EUR/USD major, a fresh wave of greenback weakness across the board, with the key US Dollar Index tumbling to its lowest level since December 2014, has been one of the key factors underpinning demand for dollar-denominated commodities - like gold.

• USD: Some downside risks alleviated - Westpac

Moreover, diminishing odds for additional Fed rate hike action in 2017, reinforced by a sharp slide in the US Treasury bond yields was also seen benefitting the non-yielding yellow metal.

• US 10-year Treasury yield hits lowest since US elections

Meanwhile, persistent geopolitical tensions in the Korean peninsula, with N. Korea reportedly preparing for another ICBM launch as soon as Sept.9, provided an additional boost to the precious metal's safe-haven appeal and further collaborated to the up-move to the highest level since mid-August 2016.

• US Pres. Trump: Military action would certainly be an option in N.Korea

Technical levels to watch

Immediate resistance remains near $1357-58 zone, above which the commodity is likely to dart towards $1365-67 hurdle en-route 2016 yearly tops resistance near $1375 level.

On the flip side, profit taking slide below $1350 level could get extended back towards $1339 horizontal support ahead of $1333 area.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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