Gold holds at three-week highs

Gold is heading for the second weekly gain, now trading at $1245 levels; its highest level in three-weeks. 

USD weakness supports gold

The Dollar Index fell to a 13-month low of 93.89 in the overnight trade and is headed for the weekly loss. The greenback is being offered on the back of weak US data and the resulting speculation that the Fed would go slow with the policy normalization. 

The decline in the treasury yields also helps the yellow metal maintain the bid tone. The US 10-year Treasury yield fell to a three-week low of 2.238% yesterday and currently trades around 2.26%. 

The yellow metal may remain well bid ahead of the weekend, unless the dollar sees a technical recovery. 

Gold Technical Levels

A break above $1247.20 (previous day’s high) would open up upside towards $1260 (June 23 high) and $1272.40 (May 1 high). On the downside, breach of support at $1234.60 (previous day’s low) could yield a sell-off to $1221.80 (July 6 high) and $1216.50 (July 5 low).