Gold rebounds from weekly lows, turns neutral around $1945 region
- Gold stages a modest bounce from near three-month-old ascending trend-line support.
- A modest USD pullback was seen as a key factor lending some support to the commodity.
- A cautious opening in the US equity markets, sliding US bond yields remained supportive.
Gold managed to recover the early lost ground to weekly lows and was last seen trading in the neutral territory, around the $1945 region.
The precious metal found a decent support near a three-month-old ascending trend-line, around the $1927 region, and gained some traction during the early North American session. The US dollar struggled to preserve its early gains despite a larger than expected drop in the US Initial Jobless Claims and extended some support to the dollar-denominated commodity.
Separately, the US ISM Non-Manufacturing PMI edged lower to 56.9 in August as compared to consensus estimates pointing to a drop to 57 from 58.1 previous. The greenback was pressured by a sharp turnaround in the US equity markets, which further collaborated towards driving flows towards the non-yielding yellow metal.
The uptick could also be tied to a cautious opening in the US equity market, which tends to underpin the precious metal's relative safe-haven status. Bulls, however, lacked any strong conviction and refrained from placing any aggressive bets ahead of Friday's release of the closely watched US monthly jobs report – popularly known as NFP.
From a technical perspective, the commodity has been showing some resilience near the mentioned trend-line support. This makes it prudent to wait for a convincing breakthrough before positioning for any further depreciating move. Conversely, any meaningful move up is more likely to confront a stiff resistance ane remain capped near the $1970-72 area.
Technical levels to watch