- Gold bulls fight back control despite risk-on mood.
- Firmer European stocks exacerbate the pain in the US dollar.
- All eyes on the US NFP report for fresh direction in gold.
Gold (XAU/USD) buyers are seeing some fresh signs of life in the European session this Thursday, courtesy of the risk-on rally in the European stocks that intensified the selling pressure around the greenback.
The haven demand for the US dollar was destroyed, as investors shunned safety in favor of the higher-yielding/ risk assets such as the equities, US stock futures and oil. This, in turn, rescued the XAU bulls after they witnessed a massive slump on Wednesday.
The yellow metal hit a three-day low of 1759.26, eroding $30 from eight-year highs of 1789.28 reached a day before, despite the sell-off in the US currency. The traditional safe-haven tumbled after solid US Manufacturing PMIs and promising coronavirus vaccine results re-ignited hopes for a quick economic rebound.
Heading into the US NFP showdown, gold looks to extend its recovery mode, as the buyers remain expectant of not so encouraging US jobs data amid a resurgence of the virus in the country. An upbeat June NFP number, i.e, above +3000K, could revive the recent corrective downside in the precious metal.
Gold technical levels
The Technical Confluences Indicator shows that a cluster of support levels are seen around $1765, which could continue to limit the downside. To the upside, the next significant hurdle is aligned around $1778-79 region, the intersection of the previous week high and Fibonacci 61.8% one-day.