Gold clocks 10-day highs near $ 1263 on broad US dollar sell-off

• Technical correction extends above $ 1260 amid broad-based USD weakness.
• Lingering US-Sino trade tensions support, as the focus shifts to the US CPI due later this week.

Gold (futures on NYMEX) is seen fading the upmove to $ 1263.10 – fresh ten day tops, although remains above the $ 1260 mark amid persisting broad-based US dollar selling.

The greenback extended its bearish momentum and hit fresh three-and-a-half week lows against its major peers, in the wake of dismal US jobs data that showed slower-than-expected wage growth. A weaker greenback makes the USD-denominated gold cheaper for its buyers in foreign currency and vice-versa.

The latest leg down in the metal can be partly attributed to the risk-on sentiment prevalent across the financial markets, which usually tends to dampen the sentiment around the safe-haven gold.

However, gold prices will continue to derive some support from the ongoing US-China trade tensions and UK political uncertainty, especially after three Brexit Ministers resigned earlier today amid a split on the UK PM May’s new Brexit plan.

Looking ahead, the US inflation report will have a major impact on the bullion this week. In the meantime, the USD dynamics and risk trends will continue to drive the gold trades.

Gold Technical Levels

Omkar Godbole, FXStreet’ Analyst offer key technical levels for trading gold in the day ahead.

Resistances: $1,261 (July 4 high), $1,274 (23.6% of recent sell-off), $1,282 (May 21 low).

Supports: $1,254 (session low), $1,244 (June 28 low), $1,237 (July 3 low).