Gold climbs to fresh session tops, around $1230 level

   “¢   A sharp USD retracement prompts some aggressive short-covering move.
   “¢   The bullish momentum seemed unaffected by the prevalent risk-on mood.

Gold continued scaling higher through the early North-American session and refreshed daily tops, around $1230 region in the last hour.

After yesterday’s sharp fall to three-week lows, the precious metal witnessed some aggressive short-covering move on Thursday and snapped three consecutive days of losing streak. A sharp US Dollar retracement from 17-month tops was seen as one of the key factors underpinning demand for the dollar-denominated commodity.

With the USD price dynamics turning out to be an exclusive driver of today’s strong intraday up-move, the precious metal has now recovered a major part of its losses recorded in the past two trading session and seemed rather unaffected by the prevalent risk-on mood, which tends to dent demand for traditional safe-haven assets.

The USD selling bias remained unabated following the release of second-tier US economic data – initial weekly jobless claims and prelim nonfarm productivity/unit labour costs for the third quarter of 2018. Today’s US economic docket also features the release of ISM manufacturing PMI, which will be looked upon for fresh impetus and some short-term trading opportunities.

Technical levels to watch

Any follow-through up-move is likely to confront some fresh supply near the $1234-35 region, above which the commodity seems all set to aim towards retesting multi-month tops, around the $1240 area. On the flip side, $1222 level now seems to protect the immediate downside, which if broken might prompt some additional weakness back towards $1215-14 horizontal support.