• A modest USD profit-taking slide prompts short-covering from an important support.
• Weaker equities underpin safe-haven demand and provide an additional boost.
• US PPI eyed for some trading impetus ahead of Thursday’s more relevant CPI print.
A modest US Dollar profit-taking slide, especially after the recent relentless rally to multi-month tops, was seen as one of the key factors behind the precious metal's rebound from an intraday low level of $1304.32. A weaker greenback tends to benefit dollar-denominated commodities - like gold.
This coupled with a mildly negative tone around European equity markets provided an additional boost to the precious metal's safe-haven appeal and remained supportive of the goodish rebound back above the $1310 level.
However, a strong follow-through uptick in the US Treasury bond yields, amid rising speculations that the Fed might be forced to opt for a steeper monetary policy tightening cycle, kept a lid on any further up-move for the non-yielding yellow metal.
Technical levels to watch
Any subsequent recovery beyond $1314-16 immediate resistance is likely to get extended and might assist the commodity to aim towards testing 100-day SMA barrier near the $1325 region.
On the flip side, $1306-05 zone (200-DMA) might continue to protect the immediate downside, which if broken might turn the metal vulnerable to break below the...