Gold spikes to fresh session tops, around $1280 level
• Gains some positive traction on modest USD pullback.
• Surging US bond yields/risk-on mood capping gains.
• US tax bill vote eyed for directional impetus.
Gold reversed an early dip to $1275 level and refreshed session tops during the early NA session, in what has been a lacklustre trading session.
The latest leg of sharp uptick over the past hour or so could be solely attributed to a modest USD pull-back. In fact, the key US Dollar Index surrendered majority of its early strong gains after softer-than-expected US economic data and eventually benefitted dollar-denominated commodities - like gold.
However, the prevalent risk-on environment failed to support the precious metal's safe-haven appeal and provide any additional boost. This coupled with surging US Treasury bond yields further collaborated towards keeping a lid on any additional up-move for the non-yielding commodity.
Looking at the broader picture, the yellow metal has been lacking any firm directional bias and remains within a broader trading range. Hence, traders are likely to wait for a decisive move in either direction before positioning for the next leg.
Today's key vote on the long-awaited US tax legislation could act as a key fundamental trigger and determine the commodity's near-term trajectory.
Technical levels to watch
Immediate resistance is pegged near the $1284-85 region, above which the commodity is likely to aim towards testing $1290 hurdle before eventually darting towards the $1300 handle.
On the flip side, $1275-74 zone might continue to act as immediate support, which if broken could accelerate the slide back towards $1269 strong support.