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NEWS
Gold climbs to session tops, around $1180
By Haresh Menghani | August 16, 2018 12:25 GMT
Gold climbs to session tops, around $1180
• A modest USD retracement prompts some aggressive short-covering move.
• Risk-on mood/surging US bond yields do little to hinder the positive momentum.

Gold extended its steady recovery move from 19-month lows and is currently placed at fresh session tops, around the $1180 region.

The precious metal stalled its recent bearish slide and quickly reversed an early Asian knee-jerk slide to $1160 level, the lowest since early Jan. 2017. A temporary pause in the recent US Dollar upsurge was seen as one of the key factors prompting some short-covering around dollar-denominated commodities, including gold.

Meanwhile, a modest recovery in investors’ appetite for riskier assets, triggered by news of renewed US-China trade talks and which tends to undermine the precious metal’s safe-haven demand, did little to hinder the goodish rebound.

Traders also seemed to have largely negated resurgent US Treasury bond yields, with the USD price dynamics turning out to be an exclusive driver of the non-yielding yellow metal’s positive momentum through the mid-European trading session.

It, however, remains to be seen if the uptick is backed by any genuine buying or is solely led by short-covering amid near-term oversold conditions and especially after this week’s steep decline of over 4%.

 

Technical levels to watch

Any subsequent up-move is likely to get extended towards $1192-93 supply zone, above which the metal is likely to aim towards reclaiming the key $1200 psychological mark. On the flip side, immediate support is now pegged near the $1172-70 region, which if broken might negate prospects for any further recovery and turn the commodity vulnerable to continue with its well-established bearish trend.

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