Gold testing session tops, just below $1280 level

Haresh Menghani FXStreet

Having test 100-day SMA support, gold regained some fresh traction and turned positive for the third consecutive session.

Currently trading around $1278 level, testing session tops, the precious metal was seen benefitting from a subdued US Dollar price action and inched back closer to weekly highs touched in the previous session.

Declining US Treasury bond yields kept a lid on the recent greenback rally and was seen extending support to the non-yielding yellow metal.

Moreover, the prevalent cautious environment around equity markets was also seen boosting demand for traditional safe-haven assets and collaborated to the commodity's up-move through mid-European session.

Further gains, however, are expected to remain limited as investors are likely to refrain from placing aggressive bets ahead of the keenly watched US non-farm payrolls (NFP) report on Friday.

Ahead of Friday's key event risk, speeches from influential FOMC members - the Fed Governor Jerome Powell and Philadelphia Fed President Patrick Harker, along with the US economic data could provide opportunities for short-term traders.

• Fed Chair candidate Powell to speak on US Treasury Markets - ING

Technical levels to watch

Immediate strong resistance remains near $1282 area, above which the metal is likely to dart towards $1291 hurdle with some intermediate resistance near the $1286-87 region.

On the flip side, any retracement might continue to find support at 100-day SMA, near the $1273 region, which if broken could drag the commodity back towards $1268-67 intermediate support ahead of $1260 level.

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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