Gold making headways towards $ 1360 in Asia

Gold prices extend its bullish move into the third straight session and now look to test $ 1360 mark amid broad based US dollar weakness, in wake of increased uncertainty about Fed rate rises this year.

Gold breaks above all major DMAs   

Currently, gold trades 0.20% higher at fresh session lows of 1355, flirting around session highs reached at 1356.10 last hour. After witnessing volatile trades in the last US session, the bullion regained momentum after the US dollar sell-off accentuate, as markets price-out a Sept rate hike on indecisiveness amidst Fed members.

Analysts at Rabobank noted, “The minutes of the FOMC meeting of July 26-27 revealed a lack of consensus that makes a September rate hike unlikely. Participants did agree that the near-term risks to the US economic outlook had diminished after the strong rebound in employment growth in June and the resilience of financial markets after Brexit. “

Looking ahead, focus will continue to remain on the Fed speaks and US macro updates, which will have significant impact on the Fed rate hike prospects and hence, impact the gold prices.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

Gold Technical Levels                                   

The metal has an immediate resistance at 1358.11 (Aug 16 high) and 1360 (round figure). Meanwhile, the support stands at 1346 (5-DMA) below which doors could open for 1343 (10 & 20-DMA confluence.