Gold clings to minor recovery gains, reviving USD demand capping gains
• A modest USD uptick negated by sliding US bond yields.
• Risk-off environment underpinning safe-haven demand.
Gold held on to its modest recovery gains through the mid-European session but now seems struggling to gain any strong follow-through traction further beyond $1340 level.
Reviving US Dollar demand, supported by Friday's strong US wage growth data, was seen capping any strong gains for dollar-denominated commodities - like gold. The negative factor, to some extent, was negated by a sharp retracement in the US Treasury bond yields, which was eventually seen lending some support to the non-yielding yellow metal.
Moreover, the risk-off environment, as depicted by a selloff across global equity markets was further seen underpinning the precious metal's safe-haven appeal and should continue to limit any immediate sharp downslide, at least for the time being.
Traders now look forward to the US economic docket, highlighting the release of ISM non-manufacturing PMI, for some short-term trading opportunities.
Technical levels to watch
On a sustained move beyond $1340 level is likely to accelerate the up-move towards $1348-50 intermediate hurdle before the metal eventually darts back towards retesting $1358 supply zone. On the flip side, weakness back below the $1331-30 region might turn the pair vulnerable to extend the slide towards $1326 horizontal support en-route $1320 strong support.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
