Gold extends rally to fresh 10-month highs above $1330

After closing the first day of the week $5 higher despite the subdued market action, the troy ounce of the precious metal continued to gather value in USD terms and reached its highest level since April at $1334.44. As of writing, the XAU/USD pair was up 0.56% on the day at $1333,70.

Today's uninspiring ZEW sentiment data from the euro area and Germany kept investors from risky assets and boosted the demand for safe-havens such as gold. Major European equity indexes stay under pressure with Germany DAX and the UK's FTSE losing 0.3% and 0.55%, respectively, at the time of press. Additionally, Wall Street started the day in the negative territory dragged lower by heavy losses in financials and industrial sectors.

Reflecting the dismal mood, the 10-year US T-bond yield is also losing 0.8% on a daily basis and weighing on the greenback. The US Dollar Index, which recorded losses in the last three trading days, recovered to the 97 area earlier in the day but failed to preserve its momentum and was seen virtually unchanged near 96.80.

With the U.S. economic docket not offering any significant macroeconomic data releases in the remainder of the day, the pair's action could continue to be impacted by the markets' risk perception.

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