Gold looking for a bullish break through $1295 strong barrier
• Persistent USD weakness helps regain traction.
• A modest uptick in the US bond yields capping gains.
• US housing data/Fedspeaks eyed for fresh impetus.
Gold continued gaining some positive traction through the mid-European session on Monday and might now be looking to finally breakthrough $1295-96 supply zone.
Last week's dovish FOMC meeting minutes, revealing policymakers' concerns over stubbornly low inflationary pressure, continued exerting some downward pressure on the US Dollar and was seen lending support to the dollar-denominated commodity.
Meanwhile, the prevalent positive trading sentiment around European equity markets kept a lid on the precious metal's safe-haven appeal.
Hence, it would now be interesting to see if the up-move is sustainable or once again meets with some fresh supply at higher levels amid a modest pickup in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.
Traders now look forward to the US housing market data - new home sales data, followed by speeches by Minneapolis Fed President Neel Kashkari and New York Fed President William Dudley would be looked upon for some trading impetus.
Technical levels to watch
A follow-through buying interest beyond $1295-96 barrier has the potential to continue lifting the metal towards the $1300 handle en-route Oct. monthly highs resistance near $1306 level.
On the flip side, retracement back below $1291 level could drag the commodity back towards $1285 level ahead of $1280 and $1275 support levels.