- XAU/USD rallies 4% on the week to reach $1,960 highs.
- Risk appetite boosts gold demand and sends the USD tumbling.
Gold futures have ticked higher on Friday to reach seven-week highs at $1,960. Bullion has appreciated nearly 4% on the week boosted by USD weakness amid post-US election risk rally.
XAU/USD rallies on risk appetite
The mild pullback from Thursday’s highs ar $1950 area found support at $1,935 and the yellow metal resumed its uptrend during the European trading session. The weaker greenback amid a broad risk rally has boosted the dollar-denominated commodity which is set to close its best weekly performance in four months.
The outcome of the US Presidential elections, with the Democrat candidate, Joe Biden, reaching closer to the White House and the Republicans holding control of the senate has boosted appetite for risk. Investors have welcomed the perspective of a split congress that might block Democrat attempts to tighten economic regulations or hike rates to Corporate America.
The upbeat US Non-Farm Payrolls report, which has shown a 638,000 increment on private sector employment in October, beating market expectations of 600,000 rise, has given a mild impulse to the USD. The pair, however, has been contained above $1,940 again, to bounce up shortly afterwards and consolidate beyond $1,950 near the weekly close.
From a technical perspective, the pair lies now right below mid-September highs at $1,970. Above here, next potential resistance lies at $2,015 (August 18 high) which guards the path towards long-term high at $2,075 (August, 7 high).
On the downside, immediate support lies at $1,930/40 (12, 21 October highs) before the 50-day SMA, at $1,915 and $1,880 (November 4 low).
Technical levels to watch
Credit: FX Street