- Gold regained positive traction on Friday and reversed the previous day’s losses.
- The heavily offered tone was seen as a key factor that undermined the commodity.
- The upbeat market mood kept a lid on any further gains, at least for the time being.
Gold refreshed daily tops, around the $1965 region during the early North American session, albeit quickly retreated around $12 in the last hour.
The precious metal caught some fresh bids on the last day of the week and reversed the previous day’s modest losses. The heavily offered tone surrounding the US dollar was seen as one of the key factors that benefitted the dollar-denominated commodity.
The greenback weakened across the board and was being pressured by the Fed Chair Jerome Powell overnight comments. During his keynote speech at the Jackson Hole Symposium, Powell said that the Fed is willing to tolerate inflation overshooting the 2% target.
The remarks raised speculations that the Fed will increase its monetary stimulus and keep rates lower for longer to support the uneven economic recovery from the coronavirus pandemic. This, in turn, extended some additional support to the non-yielding yellow metal.
However, the upbeat market mood – as depicted by indicators on a strong opening in the US equity markets – undermined the precious metal’s safe-haven demand and kept a lid on any further gains, rather led to a modest pullback from daily tops.
From a technical perspective, the commodity has been oscillating in a broader trading range over the past one week or so. This makes it prudent to wait for a sustained move in either direction before positioning for the near-term trajectory.
Technical levels to watch
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