- Gold jumped to fresh two-week tops in reaction to disappointing headline NFP print.
- A modest bounce in the US bond yields kept a lid on any further gains for the metal.
- The upbeat market mood might further cap the upside for the safe-haven commodity.
Gold reversed an early North American session fall to the $1833 region and climbed to near two-week tops, around the $1848 region in the last hour.
The precious metal gained some traction and broke out of its daily consolidative trading range in reaction to a rather unimpressive US monthly jobs report. The headline NFP showed that the US economy added 245K new jobs in November as against 469K anticipated. Adding to this, the previous month’s reading was revised down to 610K from 638K reported previously.
The disappointment, to a larger extent, was offset by additional details, which revealed that the unemployment rate fell more than expected to 6.7% from 6.9% previous. This, along with a modest rebound in the US Treasury bond yields, provided a much-needed respite to the US dollar. This, in turn, exerted some pressure on the non-yielding yellow metal.
The USD bulls, however, remained on the sidelines amid expectations for additional US fiscal stimulus and increasing bets for further monetary easing by the Fed. The lack of buying around the greenback was seen as one of the key factors that extended some support and assisted the dollar-denominated to attract some dip-buying at lower levels.
Meanwhile, the latest optimism over the rollout of a vaccine for the highly contagious coronavirus disease remained supportive of the upbeat market mood. The risk-on flow tends to undermine demand for traditional safe-haven assets and might contribute towards capping any meaningful upside for the XAU/USD, warranting some caution for bullish traders.
Technical levels to watch
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