Gold spikes to fresh yearly tops and quickly retreats

After an initial dip below $1320 level, gold regained some fresh traction and spiked to fresh yearly tops post US jobs data.

A fresh wave of US Dollar selling pressure emerged during early NA session, following a big disappointment from the latest US monthly jobs report for August, and benefitted dollar-denominated commodities - like gold.

   •  US: Total nonfarm payroll employment increased by 156,000 in August

Against a backdrop of a weak headline NFP print, sluggish wage growth might have now dampened expectations of any additional Fed rate hike move by the end of this year. The same is being reinforced by a sharp slide in the US Treasury bond yields, which provided an additional boost to the non-yielding yellow metal.

Barring the initial bullish reaction, the precious metal seemed lacking strong follow through momentum and quickly retreated to $1322 level amid prevalent risk-on environment, which tends to dampen demand for traditional safe-haven assets.

Technical levels to watch

Bulls would be eyeing for a sustained move beyond $1325-26 area, above which the metal is likely to aim towards testing Nov. 2016 swing highs resistance near $1335 level ahead of $1340 hurdle.

On the flip side, retracement back below $1320 level could now get extended towards $1314 horizontal support, which if broken could accelerate the slide towards $1305 area en-route the $1300 handle.