Gold touches $1300 as greenback weakness persists

  • Gold preserves bullish momentum on Friday.
  • DXY eases below 92 as USD sell-off continues.

The XAU/USD pair extended its uptrend that started around mid-December on the final trading day of the year and touched the $1300 handle for the first time since October 16. As of writing, the pair was trading at $1299.80, up nearly $5, or 0.4%, on the day.

After dropping to its lowest level since July at $1236 earlier this month, the XAU/USD pair staged an impressive rally and gained more than $60 in less than 20 days. The greenback's poor performance in the second half of the month and a rising interest for commodities amid optimistic expectations of the global economic recovery gaining momentum in 2018 fueled the pair's upside. At the moment, the DXY is at 92.02, down 0.35% on the day and more than 9% on the year.

With the trading volume thinning out ahead of the New Year weekend, the pair could have a difficult time extending its daily gains. However, a yearly close above $1300 could grab the attention of more buyers in the first week of 2018.

Technical levels to consider

The pair could encounter the first hurdle at $1306 (Oct. 16 high) ahead of $1313 (Sep. 26 high) and $1320 )Sep. 18 low). On the flip side, supports could be seen at $1287 (Dec. 28 low), $1281 (Dec. 27 low) and $1273 (200-DMA).

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