Gold: Bulls regain poise, back to test $ 1300

• Bullish momentum to extend amid thin trading.
• DXY sell-off remains the main driver.

The bullish momentum seen around Gold futures on Comex gains traction in the European session, with the rates now flirting with the $ 1300 mark amid extension of the sell-off in the US dollar across the board.

The US dollar, when gauged by a basket of six major currencies accelerates the drop to test the 92 handle, the lowest levels in three months. The move lower in the greenback is mainly driven by subdued Treasury yields.

Meanwhile, gold prices also benefit from risk-off tone seen around the European equities, as markets take profits off the table, following the year-end theme.  Moreover, the rally in gold is also on the back of technical buying, after the prices closed above the 100-DMA on Wednesday.

Gold Technical Levels

Haresh Menghani, Analyst at FXStreet, noted: “Bulls would be eyeing a move towards the $1300 handle, above which the momentum seems more likely to get extended towards October monthly highs resistance around $1306 area. On the flip side, any retracement below $1293 level is likely to find strong support near the $1287 region (100-day SMA), below which the commodity could correct back towards $1276 horizontal support.