Gold recovers early lost ground, refreshes 2-week highs

After an initial dip, gold regained traction during mid-European session and has now jumped to levels not seen since the beginning of this month.

The prevalent risk-of environment is evident from persistent selling pressure in the European equity markets, with most major indices trading deep in negative territory. The same is being reinforced by sliding US treasury bond yields and is seen boosting the precious metal's safe-haven appeal. 

Meanwhile, a mildly positive tone surrounding the US Dollar, for the time being seems to be restricting further up-side. A stronger greenback tends to weigh on dollar-denominated commodities - like gold. 

However, the latest bout of political turmoil in the world's largest economy and deteriorating investors’ appetite for riskier assets should continue to drive flows towards traditional safe-haven assets, including gold. 

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Even from a technical perspective, Wednesday’s decisive break through the very important 200-day SMA further supports continuation of the near-term appreciating move in absence of any major market moving macroeconomic releases from the US. 

Technical levels to watch

Bulls would be eyeing for a follow through traction beyond $1268 immediate resistance, above which the upward trajectory could get extended towards $1275 level ahead of $1279-80 strong hurdle. On the downside, retracement below $1254 level (session low) now seems to find strong buying interest at 200-day SMA near $1247 region.