- Gold regains positive traction on Friday amid a modest USD pullback.
- The underlying bullish sentiment could limit further gains from the precious metal.
- Investors could refrain from opening new positions before the NFP report.
The oro (XAU / USD) has captured some buying at the start of the European session on Friday and has jumped to new daily highs, around the region of $ 1,810 in the last hour.
The precious metal has achieved some positive traction on the last day of the week and has recovered part of the previous day’s drop to the region of $ 1,785, the lowest level in more than two months. The latest sudden upward movement could be attributed to the surge in some selling around the US dollar, which tends to prop up dollar-denominated gold prices.
Meanwhile, the USD pullback lacks an obvious fundamental catalyst and could still be classified as profit taking amid softer tone around US Treasury yields That said, expectations of a strong economic recovery, amid the prospects of massive fiscal stimulus and progress on coronavirus vaccines, could help limit the USD’s slide.
This, along with underlying bullish sentiment in financial markets limits gains for safe-haven XAU / USD. Investors could also refrain from opening aggressive positions and prefer to stay on the sidelines ahead of Friday’s release of the US monthly NFP jobs report, to be released later at the start of the US session.
This makes it prudent to wait for some solid continuation buying before confirming that gold prices have bottomed out. Therefore, any subsequent move to the upside is more likely to face stiff resistance and stop near the $ 1,823-25 horizontal resistance zone.
Technical levels of gold
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