- A strong pickup in the euro weighed on the USD and benefitted the dollar-denominated commodity.
- A weaker tone around the US bond yields provided an additional boost to the non-yielding yellow metal.
- Indications of stable opening in the US equity markets might cap the upside, at least for the time being.
Gold finally broke out of its daily consolidative price action and shot to over one-week tops, around the $1960 region during the early North American session.
The buying interest around the shared currency picked up pace after the ECB President Christine Lagarde said that there is no need to overreact to euro’s recent gains. This, in turn, exerted some pressure on the US dollar and turned out to be one of the key factors that benefitted the dollar-denominated commodity.
The greenback was further pressured by a softer tone surrounding the US Treasury bond yields, which provided an additional boost to the non-yielding yellow metal. Meanwhile, the latest leg of a sudden uptick over the past hour or so could further be attributed to some technical buying above the $1951 horizontal resistance.
However, a goodish rebound in the US equity futures undermined the precious metal’s safe-haven status and might keep a lid on any strong gains, at least for the time being. This makes it prudent to wait for some strong follow-through buying before positioning for additional gains toward the next hurdle near the $1970-72 region.
On the economic data front, the US Initial Weekly Jobless Claims came in at 884K during the week that ended September 5. The reading matched last week’s upwardly revised print and was slightly higher than consensus estimates of 846K, albeit did little to provide any meaningful impetus.