Gold finally broke out of its European session consolidation phase and surged to fresh multi-week tops, beyond $1250 level during early NA session.
A fresh wave of greenback selling pressure seems to have emerged on Friday, with the key US Dollar Index sinking to fresh 13-month lows below the 94.00 handle and boosted demand for dollar-denominated commodities - like gold.
This coupled, the ongoing slide in the US Treasury bond yields, amid fading expectations of any additional Fed rate hike action in 2017 provided an additional lift to the non-yielding precious metal's recovery move from near 4-month lows touched last week.
Moreover, possibilities of some stops being triggered on a sustained move above 100-day SMA hurdle near $1247-48 region might have also contributed to the metal's sharp spike over the past hour or so.
Meanwhile, a sharp deterioration in investors' risk appetite, as depicted by a steep sell-off in European equity markets and indications of a weaker opening in the US was also seen extending support to traditional safe-haven assets and collaborated to the yellow metal's strong up-move to the highest level since late June.
With the commodity breaking through important moving averages (200 & 1000-day SMAs) hurdles, a follow through up-move, led by short-covering, now seems a distinct possibility.
Technical levels to watch
From current levels, $1257-58 region seems to act as an immediate resistance, above which the metal is likely to extend the upward trajectory towards $1266 horizontal resistance en-route its next major hurdle near $1279 level.
On the downside, any pull-back now seems to find immediate support at 100-day SMA near $1248-47 region, below which the metal could correct to $1241 horizontal level ahead of $1235 support.
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