Gold spikes to over 1-month tops, weaker USD/trade war fears supportive

   •  Renewed USD selling helps regain traction on Friday.
   •  A fresh wave of risk aversion trade underpins safe-haven assets.
   •  Follow-through buying would confirm a fresh bullish breakout.

Gold finally broke out of its Asian session consolidation phase and spiked to over one-month tops in the last hour. 

After yesterday's modest pull-back, a fresh wave of US Dollar selling pressure was seen underpinning demand for dollar-denominated commodities - like gold. Adding to this, the US President Donald Trump's anti-China tariffs revived fears of a full-blown trade war and triggered a fresh wave of global risk aversion trade, which provided an additional boost to the precious metal's safe-haven appeal.

The risk-off mood, as depicted by a selloff across global equity markets, was further reinforced by a follow-through retracement in the US Treasury bond yields and remained supportive of the strong bid tone surrounding the non-yielding metal.

Meanwhile, possibilities of some trading stops being triggered on a move beyond $1340 level might have further collaborated to the commodity's sharp spike over the past hour or so. Hence, it would be prudent to wait for a follow-through buying interest to confirm if the up-move marks a fresh bullish breakout or is only a stop-run.

Later during the early NA session, the release of US durable goods orders data might now provide some impetus and would be looked upon for some short-term trading impetus on the last trading day of the week.

Technical levels to watch

Immediate resistance is now pegged near $1346 level, above which the metal seems all set to aim back towards testing its next hurdle near the $1352-53 region and $1357 level. On the flip side, $1340 level now seems to protect the immediate downside, which if broken could accelerate the fall back towards $1332-30 horizontal support area.