Gold clings to gains near $1290 area, 6-1/2 month tops
• Worries about global growth continue to underpin safe-haven demand.
• A weaker USD provides an additional boost and remains supportive.
• Today’s US economic data to provide some impetus ahead of Friday’s NFP.
Gold trimmed a part of its early strong gains but remains within striking distance of over 6-1/2 month tops, set earlier today.
The precious metal built on its recent positive momentum and was off to a good start in 2019. The ongoing up-move to the highest level since mid-June remained supported by growing worries about a sharp global economic slowdown, which propelled demand for perceived safe-haven assets, including gold.
A rare revenue warning from Apple Inc cemented fears over a stuttering global economy and triggered a fresh wave of global risk-aversion trade on Thursday. This coupled with a weaker US Dollar, amid no signs of an agreement to end a partial government, provided an additional boost to the dollar-denominated commodity.
Global equity markets recouped some of the early losses and now seemed to be the only factor keeping a lid on any strong follow-through up-move as market participants now look forward to the US economic docket - featuring the release of ADP report and ISM manufacturing PMI, for some fresh impetus.
Investors will also be looking for cues from the latest US monthly jobs report (NFP), which along with a joint discussion between the Fed Chairman Jerome Powell and former Fed chairs Janet Yellen and Ben Bernanke might assist determine the next leg of a directional move for the non-yielding yellow metal.
Technical levels to watch
A follow-through buying has the potential to continue lifting the commodity further towards reclaiming the $1300 mark en-route June 2018 swing high, around the $1209 region. On the flip side, the $1284 region now seems to act as immediate support, which if broken is likely to accelerate the fall towards $1275 horizontal support.