Gold price rose slightly above $1,200 on Thursday and recovered a part of the previous session’s corrective slide from 1-1/2 week tops, albeit lacked any strong follow-through. Where is the yellow metal headed next?
4 October, GKFX – A combination of supporting factors helped the precious metal to regain some positive traction and climb back above the key $1200 psychological mark during the early European session.
Gold Price Rises Above $1,200
After yesterday’s strong upsurge, triggered by stronger than expected ADP report and stellar US ISM non-manufacturing PMI, the US Dollar bulls took a brief pause and extended some support to the dollar-denominated commodity.
Adding to this, a slight deterioration in investors’ risk-appetite, as depicted by a sea of red across global financial markets, underpinned demand for traditional safe-haven assets and provided an additional boost.
However, the ongoing runaway rally in the US Treasury bond yields, supported by the Fed Chair Jerome Powell’s comments that the Fed may raise interest rates past ‘Neutral’ kept a lid on any meaningful up-move for the non-yielding yellow metal.
Hence, traders are likely to wait for a strong follow-through buying before initiating any aggressive bullish positions ahead of Friday’s keenly watched US monthly jobs report, popularly known as NFP.
Technical levels to watch
Immediate resistance is pegged near $1204 level and is followed by a strong hurdle near the $1208-10 region, above which the commodity seems all set to extend the positive momentum towards $1222-23 supply zone.
On the flip side, the $1194 zone seems to protect the immediate downside, which if broken is likely to accelerate the fall further towards retesting the $1180 support area.
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