“¢ Reviving trade war fears offset USD strength/resurgent US bond yields.
“¢ Traders await a decisive break through the weekly trading range.
“¢ Today’s release of the US NFP report might provide the required impetus.
Gold stalled its overnight rejection slide from the very important 200-day SMA and steadied near the $1300 handle on the last trading day of the week.
As Italian political turmoil receded, a goodish pickup in the US Dollar demand on Thursday prompted some fresh selling around dollar-denominated commodities – like gold. This coupled with resurgent US Treasury bond yields further collaborated towards capping gains for the non-yielding yellow metal near a technically important moving average.
Despite a follow-through, USD/US bond yields uptick on Friday, reviving concerns of a full-blown global trade war underpinned the precious metal’s safe-haven and helped limit further downside. The Trump administration refused to extend the temporary exemption to tariffs on imported steel and aluminium for the EU, Canada and Mexico and reignited trade-war fears.
Today’s focus would remain on the release of keenly watched US monthly jobs report, popularly known as NFP, which is known to trigger a bout of volatility across global financial markets and should eventually produce some meaningful trading opportunities.
Looking at the broader picture, the commodity has been oscillating within a broader trading range since the beginning of this week and hence, it would be prudent to wait for a decisive break before positioning for the next leg of directional move.
Technical levels to watch
Any meaningful up-move might continue to confront some fresh supply near the $1305-07 region (200-DMA), above which a bout of short-covering could lift the metal towards $1314-15 intermediate resistance en-route $1321-22 supply zone.
On the flip side, the $1295-93 is likely to protect the immediate downside, which if broken might prompt some additional weakness towards $1287-86 support area before the commodity eventually drops to retest multi-month lows support near the $1282-80 region.
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