Gold Price Analysis: XAU/USD climbs to the highest level since Feb. 25, beyond $1,780

• Gold gained strong follow-through traction for the second consecutive session on Friday.
• The USD struggled to capitalize on its attempted recovery and benefitted the commodity.
• Rebounding US bond yields, the risk-on mood did little to hinder the positive momentum.

Gold scaled higher through the mid-European session and shot to the highest level since February 25, around the $1,783-84  region in the last hour.

The precious metal built on the previous day’s bullish breakout momentum through the $1,760-65 region and gained some follow-through traction for the second consecutive session on Friday. The US dollar struggled to preserve its modest intraday gains, instead witnessed met with some fresh supply at higher levels. This, in turn, was seen as a key factor that benefitted the dollar-denominated commodity.

Despite the incoming strong US economic data, investors now seem convinced that the Fed will keep interest rates near zero levels for a longer period. Apart from this, a pullback in the US Treasury bond yields further undermined the USD and provided an additional boost to the non-yielding yellow metal. Bulls seemed unaffected by the prevalent risk-on environment, which tends to undermine the safe-haven XAU/USD.

Meanwhile, Friday’s strong move up validated the overnight breakout through the double-bottom neckline resistance. Hence, the momentum could further be attributed to some technical buying and supports prospects for additional gains. The XAU/USD now seems all set to extend the momentum further towards reclaiming the $1,800 mark for the first time since late February, en-route 100-day SMA barrier near the $1,803-05 region.

Market participants now look forward to the US economic docket, featuring the releases of Housing Starts, Building Permits and prelim Michigan Consumer Sentiment Index. This, along with the US bond yields, will influence the USD price dynamics. Traders might further take cues from the broader market risk sentiment in order to grab some short-term opportunities around the XAU/USD on the last day of the week.

Technical levels to watch