Gold eyes April highs $1,295 on continued dollar weakness

Gold has reemerged on the bid since the double bottom on the 18th May, relishing within the broad-based weak dollar environment and DXYdropping back below the 97 handle.

A multi-year downturn in the dollar in the making? - Nomura

Gold has been better bid since DXY lost the 99 handle in a strong offer from 9th May 99.65 highs. The markets are trading on a good mix of political and economic challenges that world leaders are facing and the general risk tone is weighted more negatively. This enables the gold to run higher in times of risk aversion. The key scenario unfolding, however, is that the dollar is losing its safe haven status currently on both the political and economic front. While markets are pricing in rate hikes still this year, there are some doubts as to whether the Fed can sustain the optimism in the wake of weaker than expected key data of late. The 10-year treasuries are showing signs that the 2.3% psychological level is becoming a bit of a ceiling of late and that too is weighing on the greenback. 

Gold levels

In terms of levels, Gold is back to 1,260 and made a high of 1,262.79 today. A continuation through 1,265 opens the avenue for 1,270. 1277, 1288 and finally 1292 are the key resistance n the way to the April highs. To the downside, a loss of the 1260 level opens 1255 and the 20 4hr sma as a key support level.