Gold sits at session tops, near $1260 on weaker USD

• Benefitting from persistent USD selling bias.
• Surging US bond yields/risk-on moods does little to hinder the up-move.

Gold continued gaining positive traction through the early NA session and is currently placed at session tops, around the $1259-60 region.

Some uncertainty over the passage of a long-awaited US tax cut bill and doubts over the pro-growth effect of the reforms kept exerting downward pressure on the US Dollar and was seen benefitting dollar-denominated commodities - like gold.

Meanwhile, traders seemed to have largely ignored a goodish pickup in the US Treasury bond yields, which usually drives flows away from the non-yielding yellow metal. Even the prevalent risk-on mood, which tends to cap gains for traditional safe-haven assets, also did little to halt the precious metal's up-move on Monday.

The USD price dynamics would continue to act as an exclusive driver of the commodity's moves as investors now look forward to this week's important US macro data for some fresh directional impetus.

Technical levels to watch

A follow-through buying interest beyond $1260-62 area now seems to pave the way for an extension of the up-move back towards the very important 200-day SMA hurdle near the $1268 region.

On the flip side, $1255 level now becomes an immediate support to defend, which if broken could drag the commodity back below $1250 level towards its next important support near the $1245-44 region.

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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