“¢ The global flight to safety helps gains strong positive traction.
“¢ Renewed USD selling/weaker US bond yields remain supportive.
“¢ Technical studies support prospects for further near-term gains.
Gold continued scaling higher through the mid-European session and spiked to three-month tops in the last hour.
A fresh wave of risk-aversion trade – as depicted by a sea of red across global equity markets, coupled with rising geopolitical tension underpinned the precious metal’s safe-haven demand and helped break through a one-week-old trading range.
Adding to this, the prevalent US Dollar selling bias provided an additional boost to the dollar-denominated commodity and further collaborated to the ongoing positive momentum to the highest level since Oct. 17.
Meanwhile, the global flight to safety was evident from a sharp fall in the US Treasury bond yields, which partly offset Fed rate hike expectations and remained supportive of the strong bid tone surrounding the non-yielding yellow metal.
With today’s strong up-move, the commodity now seems to have confirmed a bullish break through 100-day SMA and hence, a follow-through bullish momentum, led by some fresh technical buying, now looks a distinct possibility.
Technical levels to watch
Any subsequent up-move now seems to confront immediate resistance near the $1240 horizontal level, above which the commodity is likely to aim towards testing the $1251-52 supply zone. On the flip side, the $1230 area, closely followed by the $1224 region (100-DMA) now seems to protect the immediate downside, which if broken might trigger some additional weakness towards $1215 support.
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