Gold clocks 8-day high in Asia

Omkar Godbole FXStreet Contributor

Gold (XAU/USD) prices clocked a 8-day high of $1283.50 in Asia on the back of weak China services PMI and renewed North Korea fears.

The safe haven yellow metal took out the 4-hour 50-MA hurdle earlier today. The bid tone strengthened in response to comments from North Korea's leader Kim Jong Un that his nuclear weapons were a "powerful deterrent" that guaranteed its sovereignty.

Reports had hit the wires on Friday that Pyongyang is preparing to test a long-range missile, which it believes can reach the west coast of the United States.

The uptick seen today in gold prices could be a delayed reaction to Friday's NKorea news as the yellow metal remained calm ahead of the weekend, while the Yen had rallied. The tables have turned today as the Japanese Yen has surrendered gains, while gold is on the rise.

Also helping the yellow metal is the signs of slowdown in the economic activity in the world's second largest economy. China September Caixin PMI came-in at a 21-month low of 50.6.

Trading volumes may drop during the day ahead as the US markets are closed on account of Columbus day. Thus, erratic price action could be seen.

Gold Technical Levels

The metal was last seen trading around $1283 levels. A break above $1288.16 (Sep 21 low) would open up upside towards $1292.11 (Aug 11 high) and $1300 (psychological level). On the other hand, a break below $1280.95 (50% Fib R of July-Sep rally) would expose $1276.79 (10-DMA) and $1274.34 (previous day's low).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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