Gold climbs to near 3-week tops amid weaker USD
• Persistent USD weakness underpins demand.
• Rising inflation expectations supportive.
Gold climbed for the fourth day in a row and is currently placed at the highest level in nearly three weeks, around the $1355 region.
Spot prices quickly reversed a knee-jerk fall to an intraday low level of $1317 on Wednesday and gained strong positive traction amid renewed US Dollar weakness, which tends to underpin demand for dollar-denominated commodities - like gold.
A positive beat to the US CPI print, although fueled expectations that the Fed might opt for a faster pace of interest rate hikes this year, further benefitted the precious metal as a hedge against accelerating inflation and remained supportive of the up-move.
Today's modest uptick could also be attributed to some follow-through technical buying, especially after yesterday's bullish break through $1348-50 supply zone. Hence, it would be prudent to wait for a follow-through buying interest before positioning for additional near-term gains.
Later during the NA session, second-tier US economic releases seem unlikely to act a major game changer but might still be looked upon for some short-term trading impetus.
Technical levels to watch
Immediate resistance is pegged near $1358 level, above which the metal seems all set to head back towards $1366 area (2018 high) before eventually darting towards its next major hurdle near the $1374-75 region.
On the flip side, the $1350-48 region now seems to protect the immediate downside, which if broken might prompt some additional profit-taking slide back towards $1340 horizontal support.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
