Gold bounces off lows, but remains capped below $1295 level
• Renewed USD selling helps recover early lost ground.
• Safe-haven demand lends additional support.
• Strong move beyond $1295 needed to confirm additional gains.
Gold managed to recover majority of its early lost ground and jumped back closer to weekly tops, albeit continued with its struggle to break through $1295 heavy supply zone.
The greenback selling pressure remained unabated on Thursday, with the key US Dollar Index tumbling to 5-week lows and benefitting dollar-denominated commodities - like gold. Adding to this, the prevalent cautious sentiment around European equity markets was further seen underpinning the precious metal's safe-haven demand.
The up-move, however, lacked any strong follow-through momentum and remained capped below the $1295 region amid a relatively quiet trading session on the back of Thanksgiving holiday in the US. Hence, traders are likely to wait for a decisive break through the mentioned hurdle before placing fresh bullish bets and committing to any additional gains in the near-term.
Technical levels to watch
A convincing break through the $1295 barrier, the commodity seems more likely to move past $1300 handle and head towards testing its next hurdle near the $1306 region.
On the flip side, bulls might continue to protect $1286-85 immediate support, which if broken could accelerate the fall towards the $1281 region (100-day SMA) en-route $1276-75 strong horizontal support.