Update: Gold traded with a mild negative bias around the $1,825 region, or daily lows, during the early North American session, albeit lacked any follow-through selling.
The downside, however, remains cushioned, at least for the time being, amid signs that the Fed will wait a bit longer before slowing its massive monetary support.
Previous update: Gold consolidated the overnight strong gains back closer to monthly tops and oscillated in a narrow trading band, around the $1,825-30 region through the first half of the European session.
Apart from this, the prevalent selling bias surrounding the US dollar extended some additional support to the dollar-denominated commodity, though the lack of any follow-through buying warrants caution for bulls.
Nevertheless, gold remains on track to record its biggest weekly gains since May 21 and seems poised to appreciate further amid signs that the Fed will stick to its ultra-lose policy stance for a longer period.
The market speculations were further reinforced by Thursday’s disappointing US GDP report, which showed that the world’s largest economy expanded by 6.5% annualized pace in the second quarter as against the 8.5% growth anticipated.
That said, it will be prudent to wait for some follow-through buying beyond the monthly swing highs, around the $1,834 region, before positioning for any further upside.
The next relevant support is pegged near the $1,765-60 region before the XAU/USD eventually drops to challenge monthly swing lows, around the $1,750 region.
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