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  • Growing trade optimism exerted some heavy pressure on Thursday.
  • The prevalent USD selling bias helped regain some positive traction.
  • Unrest in the Middle East provided an additional boost in the last hour.

Gold built on its intraday positive move and climbed to fresh session tops in the last hour, recovering a major part of the previous session’s intraday downfall.
The incoming positive trade-related headlines on Thursday boosted investors’ appetite for riskier assets and weighed heavily on traditional safe-haven assets – like Gold. The risk-on mood was further evident from a strong pickup in the US Treasury bond yields, which further collaborated towards driving flows away from the non-yielding yellow metal.

Weaker USD/reviving safe-haven demand supportive

The precious metal finally settled below the key $1500 psychological mark, near the lower end of its daily trading range, but managed to regain some positive traction on the last trading day of the week. The prevalent US Dollar selling bias was seen as one of the key factors underpinning demand for the dollar-denominated commodity.
Thursday’s softer US CPI figures reinforced market expectations that the Fed will cut interest rates further at its upcoming monetary policy meeting on October 29-30. This coupled with a modest intraday pullback in the US Treasury bond yields kept exerting some downward pressure on the Greenback through the early European session on Friday.
Meanwhile, the latest leg of an uptick over the past hour or so was further supported by renewed fears about a further escalation of geopolitical tensions in the Middle East, especially after the Islamic Republic News Agency reported an explosion on an Iranian tanker near the Saudi Arabian port city of Jeddah.  
It will now be interesting to see if the precious metal is able to capitalize on the positive move as investors await the outcome from the crucial US-China trade negotiations. Later during the early North-American session, the release of Prelim UoM consumer sentiment index from the US will be looked upon for some short-term trading opportunities.

Technical levels to watch