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Gold steadily climbs back closer to 2-week tops, around $1630 region

  • Gold reversed an early dip to sub-$1600 levels amid persistent USD selling bias.
  • The Fed Chair Powell’s comments further dented sentiment around the greenback.
  • The prevailing cautious mood provided an additional boost to the precious metal.

Gold reversed an early dip to sub-$1600 levels and jumped to fresh session tops, around the $1629-30 region during the early North-American session

A combination of supporting factors assisted the precious metal to catch some fresh bids on Thursday and stall its pullback from over two-week tops set in the previous session. The early downtick remained cushioned amid persistent US dollar selling bias, which tends to underpin demand for the dollar-denominated commodity.

Against the backdrop of the Fed's unlimited QE, the greenback was further weighed down by the Fed Chair Jerome Powell's statement on Thursday. In an interview on NBC Today, Powell said that the US central bank still has room for more action to combat coronavirus crisis and provided a modest lift to the non-yielding yellow metal.

The bearish pressure surrounding the buck remained unabated following the release of awful US initial weekly jobless claims data. This coupled with the prevailing cautious mood around equity markets, despite a massive $2 trillion US stimulus package, provided an additional boost to the precious metal's perceived safe-haven status.

Given that investors remained concerns over an imminent global recession in wake of the coronavirus pandemic, the commodity seems more likely to build on its recent recovery from the $1450 strong horizontal support, or YTD lows set on March 16.

Technical levels to watch

 

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