Gold flirting with two-week highs around $1150 level

Gold extended its recovery trend and rose on Thursday for the fourth consecutive session amid broad based greenback retracement.

Currently flirting with two-week highs, around $1150 level, the US Dollar weakened across the board and was seen boosting demand for dollar-denominated commodities - like gold. This coupled with ebbing risk appetite, as depicted by weakness in equity markets, is benefitting the precious metal's safe-haven appeal. Moreover, a slump in US Treasury bond yields is further driving flows towards the yellow metal, as an alternative investment asset class. 

However, growing market expectations of further rate-hike action by the US Federal Reserve in 2017 might limit any near-term sharp appreciation for the yellow metal. 

Today's release of weekly jobless claims data from the US might trigger some short-term momentum play, but the broader trend would remain dependent on investors' expectation over the timing of next Fed rate-hike action. Hence, next week's monthly jobs report (NFP) would now be looked upon to determine the next leg of directional move for gold prices.

Technical levels to watch

A follow through buying interest above $1150 level is likely to trigger a fresh bout of short-covering and is likely to accelerate the up-move towards $1159-60 intermediate resistance, en-route $1165 strong hurdle. On the downside, previous resistance near $1144-43 area now seems to act as immediate support and is closely followed by support near $1137 level. Renewed weakness below $1137 support is likely to drag the metal back towards $1125 support area.