• Rising US bond yields capping additional gains.
• Weaker USD continues to lend support.
• Remains poised to extend the bullish momentum.
Gold stalled its mid-European retracement near $1350 level and has now moved back within striking distance of 3-week tops touched earlier.
Persistent US Dollar selling bias continues to underpin demand for dollar-denominated commodities - like gold. Moreover, the incoming US economic data has been pointing to a pickup in inflationary pressure and was further seen benefitting the commodity as a hedge against accelerating prices.
Even firming expectations over additional Fed rate hike moves in 2018 did little to attract any fresh selling around the non-yielding yellow, albeit seems to have kept a lid on any further gains, at least for the time being.
Meanwhile, the market seems to have largely shrugged off today's mostly in line weekly jobless claims data, clearly indicating the underlying strength in the US labor market. Also better-than-expected Philly Fed Manufacturing Index was negated by softer Empire State Manufacturing Index and failed to provide any meaningful impetus.
Looking at the broader picture, the commodity seems to be facing some resistance near the $1358 region and hence, it would be prudent to wait for some follow-through strength, beyond the mentioned hurdle, before positioning for any additional gains.
Technical levels to watch
A clear breakthrough the mentioned hurdle is likely to accelerate the up-move towards $1366 level (Jan. high) before the commodity eventually darts towards testing $1374-75 supply zone.
On the flip side, sustained weakness below $1350 level might prompt some additional profit-taking slide and drag the metal back towards $1340 support area with some intermediate support near $1346-44 zone.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.