“¢ The USD fails to capitalize on the post-NFP uptick and remains supportive.
“¢ Risk-off mood underpins safe-haven demand and provides an additional boost.
“¢ A goodish pickup in the US bond yields might keep a lid on any further up-move.
Gold quickly reversed the post-NFP dip to sub-$1200 level and is currently placed at the top end of its daily trading range.
The commodity initially turned lower in reaction to a sharp upward revision of the August NFP figures, a larger than expected fall in the unemployment rate and mostly in-line wage growth data.
The positive assessment of the latest US monthly jobs report was evident from a sudden spike in the US Treasury bond yields. In fact, yields on the benchmark 10-year government bond climbed to a fresh 7-year high of 2.2309% after data and eventually exerted some downward pressure on the non-yielding yellow metal.
The US Dollar, however, failed to capitalize on the post-NFP uptick and came under some fresh selling pressure, which was seen as one of the key factors underpinning demand for the dollar-denominated commodity. Adding to this, the prevalent risk-off mood, as depicted by a sea of red across European equity markets, further boosted the precious metal’s safe-haven status and provided an additional boost.
Despite a mildly positive tone, bullish traders seemed lacking strong conviction amid growing speculations that the Fed might continue to raise interest rates, albeit the commodity remains on track to post weekly gains for the second time in the previous three.
Technical levels to watch
Any subsequent up-move is likely to confront stiff resistance near the $1208-10 region, above which the commodity seems all set to aim towards testing the $1222-23 supply zone. On the flip side, the $1196-94 zone is likely to protect the immediate downside, which if broken is likely to accelerate the slide further towards $1182-81 horizontal support.
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