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• Struggles to build on Friday’s upsurge amid a modest USD rebound.
• Risk-on mood further weighs on the commodity’s safe-haven appeal.
Gold struggled to build on Friday’s strong upsurge to two-week tops and was seen consolidating in a narrow trading range at the start of a new trading week.
Comments by the Fed Chair Jerome Powell, at the closely watched Jackson Hole Symposium, reaffirmed gradual rate hike approach but downplayed the need for any aggressive policy tightening. Powell’s speech prompted investors to trim their bets for a December rate hike move and provided a strong lift to the non-yielding yellow metal on Friday.
Investors looked past Powell’s perceived dovish comments, with a modest US Dollar rebound now seemed to be only factor keeping a lid on any further up-move for the dollar-denominated commodity. Adding to this, a strong positive opening across European bourses further dented the precious metal’s safe-haven appeal and collaborated to the weaker tone.
Looking at the broader picture, today’s subdued action might still be categorized as a consolidation phase, especially after Friday’s solid single-day gains of around 1.75%. Hence, it would be prudent to wait for some follow-through weakness before confirming that the near-term corrective rally from near 20-month lows, touched on August 16, might have already run out of steam.
Technical levels to watch
Any meaningful retracement now seems to find support near the key $1200 psychological mark, below which the slide could further get extended towards $1197-96 horizontal support. On the flip side, sustained move beyond $1208-09 area now seems to pave the way for a further near-term up-move for the commodity towards $1216-17 intermediate hurdle en-route the $1222-23 region.