Gold moves back closer to multi-year tops, eyeing $1900 mark

• Gold continued to gain traction for the sixth consecutive session on Friday.
• The prevalent risk-off mood was seen underpinning the safe-haven metal.
• A subdued USD demand did little to influence or hinder the positive move. 

Gold edged higher during the early European session and refreshed daily tops, around the $1895 region in the last hour, albeit lacked follow-through.

Following the overnight modest pullback from the vicinity of the $1900 mark, or fresh multi-year tops, the precious metal regained traction and turned positive for the sixth consecutive session on Friday. The uptick was sponsored by a fresh wave of the global risk-aversion trade, which tends to benefit traditional safe-haven assets, including gold.

Concerns about worsening US-China tensions added to the economic uncertainty created by COVID-19, which took its toll on the global risk sentiment. The anti-risk flow was further reinforced by a weaker tone surrounding the US Treasury bond yields, which provided an additional boost to the non-yielding yellow metal and remained supportive.

Meanwhile, a resurgence of new coronavirus cases in the US fueled speculations that the economic recovery in the US could be grinding to a halt. This, in turn, kept the US dollar bulls on the defensive and further underpinned the dollar-denominated commodity, which has now moved well within the striking distance of all-time highs set in 2011.

The recent uptrend witnessed over the past one week or is yet to show any signs of bullish exhaustion. Moreover, the emergence of some dip-buying also supports prospects for additional gains. A sustained strength beyond the $1900 mark will add credence to the positive outlook and pave the way for a further near-term appreciating move.

Technical levels to watch