“¢ The post-NFP USD uptick turns out to be short-lived and prompts some aggressive short-covering move.
“¢ A sharp intraday slide in the US bond yields provided an additional boost and remained supportive.
Gold quickly reversed the post-NFP dip and rallied to fresh session tops, around the $1278 region, recovering the previous session downfall to fresh YTD lows.
Having dropped to an intraday low level of $1268.55 on upbeat headline NFP print and an unexpected drop in the US unemployment rate, the precious metal witnessed a dramatic turnaround amid a modest US Dollar pullback.
In what could be termed as a delayed reaction to softer wage growth data, the greenback started losing ground and was seen as one key factor prompting some aggressive short-covering around the dollar-denominated commodity.
This coupled with a sharp slide in the US Treasury bond yields, with the 10-year yield now down over 1% from daily tops, further benefitted the non-yielding yellow metal and remained supportive of the strong bounce in the past hour.
The positive momentum seemed rather unaffected by the prevalent risk-on mood, which tends to dampen demand for perceived safe-haven assets, albeit might turn out to be the only factor keeping a lid on any runaway rally.
Today’s US economic docket also features the release of ISM non-manufacturing PMI, which coupled with scheduled speeches by a slew of influential FOMC members might now be looked upon for some fresh impetus.
Technical levels to watch
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