Gold jumps back to 4-month tops on weaker USD

Haresh Menghani FXStreet

Gold continued gaining some positive traction through the early European session and is currently hovering around 4-month tops touched last week.

The US Dollar sank to fresh three-year lows, below the 90.00 round figure mark and was seen benefitting dollar-denominated commodities - like gold. Adding to this, a subdued action surrounding the US Treasury bond yields further underpinned demand for the non-yielding yellow metal and collaborated to the up-move.

Meanwhile, the latest protectionist measures by the US, the new tariffs on solar panels and washing machines, sparked concerns about a global trade battle and has led to some risk-aversion trade, which eventually provided an additional boost to the precious metal's safe-haven appeal.

With the USD still struggling to gain any respite, the commodity seems all set to build on its bullish momentum and head back towards testing September 2017 highs.

Technical levels to watch

Momentum beyond the $1344-45 region could get extended even beyond $1350 level towards 2017 highs resistance near $1357-58 region. On the flip side, retracement back below $1340 level might continue to find some support near the $1334 region, which is followed by a strong support near $1328-26 zone.

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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