Gold rallies further beyond $1750 level, highest since Oct. 2012
- Gold continued gaining strong positive traction for the fifth consecutive session on Friday.
- Worsening US-China relations seemed to be a key factor fueling the ongoing momentum.
- A subdued USD price action negated the prevalent risk-on mood and remained supportive.
Gold maintained its strong bid tone through the early European session and was last seen trading near multi-year tops, just above the $1760 level.
The precious metal prolonged its recent positive move and gained some strong follow-through traction on the first day of a new trading week. The uptick marked the commodity's fifth consecutive day of a positive move and was being fueled by worsening US-China relations.
The US Commerce Department moved to block chip supplies to Huawei Technologies. The subsequent reports flagged a possible retaliation by China, which coupled with fears about the second wave of coronavirus infections benefitted the yellow metal's safe-haven status.
Conversely, the US dollar struggled to attract any meaningful buying despite the Fed Chair Jerome Powell's optimistic comments about the US economy. A subdued USD price action remained supportive of the strong bid tone around the dollar-denominated commodity.
Meanwhile, the ongoing positive momentum to the highest level since October 2012 seemed rather unaffected by the prevalent risk-on mood, which remained supported by the easing of lockdown restrictions in some parts of the world and reviving hopes for a quick global economic recovery.
It will now be interesting to see if bulls are able to maintain their dominance or opt to take some profits off the table amid extremely overbought conditions on hourly charts and absent relevant market moving economic releases from the US.
Technical levels to watch