Gold clings to modest recovery gains, around $1280 level

Haresh Menghani FXStreet

• Trades higher on easing US Dollar.
• Fed Chair speculations capping up-move.

Gold extended previous session's pull-back from 3-week lows and edged higher through the early European session on Thursday.

Currently hovering around $1280 area, off session tops touched in the past hour, the precious metal benefitted from a mildly softer tone around the US Dollar. Despite Wednesday's upbeat durable goods orders and new home sales data, a weaker greenback was seen lending support to dollar-denominated commodities - like gold.

Adding to this, the prevalent cautious sentiment around global financial markets further underpinned the yellow metal's safe-haven demand, while retracing US Treasury bond yields was also seen providing a minor boost to the non-yielding metal.

It, however, remains to be seen if the bullion is able to build on the modest up-move or meets with some fresh supply amid speculations that the next Fed Chair could be more hawkish. Recent news reports suggest that Republican senators favored John Taylor to succeed Yellen as the next head of the US Federal Reserve.

Later during the day, ECB-led volatility could help traders grab some short-term trading opportunities ahead of the second-tier US economic data. Meanwhile, Friday's advance release of US Q3 GDP figures would help determine the commodity's near-term trajectory.

Technical levels to watch

The metal continues to find some resistance near the $1283-84 region, which if cleared could accelerate the up-move towards $1290 supply zone ahead of $1294 hurdle. On the flip side, 100-day SMA near the $1276-75 region is likely to protect the immediate downside, which if broken could drag the commodity towards $1268 level en-route two-month lows support near $1260 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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