Gold is poised to remain in the limelight this week after aggressively appreciating roughly $18 in a three-hour window.
The yellow metal surprised markets on Tuesday by soaring from $1,190 to $1208.10 reaching the highest level since September as jitters around developments in Italy fuelled risk aversion. With the Gold prices powering higher even against a broadly stronger Dollar, speculation is likely to heighten over bulls making a return. While the current picture does suggest further upside in the near term, the fundamental themes weighing on Gold still remain intact.
In regards to the technical picture, the breakout and daily close above the $1200 psychological resistance level could inspire a move towards $1213. However, the metal’s fortunes still hang on how markets react to the pending US jobs report on Friday. A solid US jobs report is likely to reinforce market expectations of higher US interest rates – ultimately diminishing appetite for zero-yielding Gold.
A scenario where bulls are unable to break above $1213 could open a path back towards $1200. Alternatively, a solid breakout above $1213 could encourage bulls to target $1225.
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