Gold jumps back above $1335 level on weaker USD

Haresh Menghani FXStreet

• Benefits from the resumption of the USD bearish slide.
• Surging US bond yields/risk-on moods fails to hinder the up-move.
• Turns back positive for the sixth straight week.

Gold gained some strong positive traction on Friday and is currently placed at fresh session tops, marginally above the $1335 region.

The precious metal stalled its recent corrective slide and has now jumped back closer to 4-month tops, touched earlier this week. Resumption of the US Dollar's bearish slide, amid concerns over a possible US government shutdown, was seen underpinning demand for dollar-denominated commodities - like gold.

Meanwhile, the market seems to have largely ignored a strong follow-through upsurge in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.

Even the prevalent positive trading sentiment around European equity markets did little to dampen the precious metal's safe-haven demand and hinder the ongoing up-move.

With today's up-move, the commodity has now recovered weekly losses and so far, is holding with some nominal gains for the sixth consecutive week. Traders now look forward to the only scheduled release of Prelim UoM Consumer Sentiment from the US and Fedspeaks for some short-term trading impetus.

Technical levels to watch

Immediate resistance is pegged near $1341 level, above which the metal is likely to surpass multi-month tops resistance near $1344 area and dart towards the $1350 region. On the downside, $1333-32 zone now seems to protect the immediate downside, which if broken might drag the commodity back towards $1325 horizontal support en-route $1320 level.

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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