Gold refreshes multi-month tops, around $1325 level

   “¢   Dovish Fed signals continue to boost demand for the non-yielding yellow metal.
   “¢   A turnaround in equities offset a modest USD rebound and remained supportive.
   “¢   Focus now shifts to Friday’s important release of the keenly watched US NFP data.

Gold continued gaining positive traction through the mid-European session and climbed to fresh multi-month tops in the last hour.

A combination of positive factors assisted the precious metal to build on the last week’s bullish breakthrough the $1295 supply zone and hold above key $1300 psychological mark for the fifth straight session. The overnight dovish Fed signals, reinforced by the ongoing fall in the US Treasury bond yields, acted as one of the key factors fueling the ongoing positive momentum for the non-yielding yellow metal.

Meanwhile, the post-FOMC US Dollar selling now seems to have abated, albeit did little to dent the prevalent bullish mood or prompt any fresh selling around the dollar-denominated commodity. The negative factor, to a large extent, seems to have been largely offset by a negative turnaround in risk sentiment, which tends to underpin the precious metal’s safe-haven demand and remained supportive.

However, slightly overbought conditions on the daily chart might now turn out to be the only factor that might keep a lid on any strong follow-through amid absent relevant market moving economic releases from the US and ahead of Friday’s keenly watched US monthly jobs report, popularly known as NFP.

Technical levels to watch