- Gold built on this week’s bullish break through the key $2000 psychological mark.
- Worries about the US economic recovery benefitted the safe-haven commodity.
- The ongoing slide in the US bond yields remained supportive of the positive move.
Gold traded with a mild positive bias through the early European session and was last seen hovering around the $2050 region, just below all-time highs set on Wednesday.
Investors remain worried about the pace of the US economic recovery due to the country's poor performance in containing the coronavirus outbreak. This, in turn, benefitted the precious metal's safe-haven status and led to a fresh bullish break through the key $2000 psychological mark earlier this week.
The market concerns were further fueled by Wednesday's disappointing ADP report, which indicated that the labour market recovery was faltering. Adding to this, the impasse over the next round of fiscal stimulus measures forced investors to dump the US dollar and provided an additional boost to the dollar-denominated commodity.
Meanwhile, the ongoing downfall in the US Treasury bond yields further drove flows towards the non-yielding yellow metal and remained supportive of the ongoing bullish momentum. In fact, the yield on the benchmark 10-year US government bond closed at a new record low of 0.52% on Tuesday amid signs that the economy is stalling out again.
However, the upbeat market mood – as depicted by the prevalent bullish sentiment across the global equity markets – kept a lid on any further gains for the commodity. This coupled with extremely overbought conditions on short-term charts might further hold bulls from placing fresh bets, rather prompt some profit-taking at higher levels.
Moving ahead, market participants now look forward to Thursday's important release of the US Initial Weekly Jobless Claims. The data might provide some short-term trading opportunities ahead of the closely watched US monthly jobs report, popularly known as NFP, scheduled for release on Friday.
Technical levels to watch
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