Gold jumps to two-week highs amid broadly weaker USD

Extending its near-term recovery trend, Gold traded higher for the third consecutive day and has now moved back above the very important 200-day SMA.

Currently trading at a fresh two-week high, around $1270, a broad based greenback retracement is benefitting the dollar-denominated commodities and driving the precious metal higher. The greenback, as measured by the overall US Dollar Index, extended its reversal from multi-month highs touched earlier this month as the incoming data forced investors to trim bets over an eventual Fed rate-hike action by the end of this year.

Moreover, the prevalent cautious sentiment, ahead of the third and final US Presidential debate between Donald Trump and Hillary Clinton, is further boosting the yellow metal's safe-haven appeal and helped recovery back above 200-day SMA strong hurdle. The US Presidential election, scheduled on November 8, now turns to be a key fundamental overhang on the US economy and hence, is likely to continue supporting traditional safe-haven assets - like gold.

Technical levels to watch

From current levels, the ongoing bullish momentum could get extended towards $1275 horizontal resistance above which the metal could aim towards reclaiming $1300 mark in the near-future.

On the downside, 200-day SMA near $1265 now becomes immediate support, which if broken is likely to drag the commodity back towards $1260-58 support before the metal eventually drops to $1250 strong horizontal support.

 

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