• A modest USD retracement prompts short-covering move.
• Sliding US bond yields lending some additional support.
• Reviving safe-haven demand supportive of the up-move.
Gold jumped to fresh session tops during the early NA session and snapped four consecutive days of losing streak.
With markets looking past Wednesday's hawkish FOMC meeting minutes, a modest US Dollar retracement was seen lending some support to dollar-denominated commodities - like gold.
Adding to this, the prevalent risk-off environment, as depicted by a sea of red across European equity markets provide an additional boost to the precious metal's safe-haven appeal. The global risk aversion was further reinforced by sliding US Treasury bond yields, which was further seen benefitting the non-yielding yellow metal.
The up-move could also be attributed to some bounce, especially when bulls showed some strong resilience near the $1320 horizontal support. However, it would be prudent to wait for a follow-through buying interest before confirming that the metal has formed a strong floor in the near-term.
Technical levels to watch
A follow-through recovery beyond $1330 level is likely to get extended towards $1338 supply zone before the commodity eventually darts back towards $1350 strong hurdle. On the flip side, weakness back below $1323 level, leading to a subsequent break through $1320 support, might now turn the metal to slide further towards $1310 level ahead of $1307-05 support area.
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