Gold Inter-Market: Yellow Metal Set to Extend the Ongoing Bullish Momentum
After a brief pause and a minor pull back on Tuesday, Gold resumed its disappointing US NFP led rally and touched a 3-week high level of $1260.
The latest leg of up-move for the precious metal from yesterday's low level was backed by risk-on rally, justified by drop in Volatility Index (VIX) that led to a rise in the broader US equity index, S&P 500.
The yellow metal has also maintained its inverse correlation with the long-term US treasury yields (30-yrs) and the USD/JPY pair, which extended their slide and have acted as a key triggers for continuation of the commodity's upside momentum.
The precious metal’s depreciating move in May was on the back of rising expectations of an imminent Fed rate-hike in June/July. The downfall, however, was not fully supported by the closely related asset classes, except for a mild recovery witnessed in the dollar-yen pair and a minor up-tick in VIX.
Now, with all the four highly correlated asset classes supporting the intrinsic price behavior, it would be fair to conclude that gold prices could be all set to build on to its ongoing bullish momentum and head towards its next major resistance near $1295, just shy of the $1300 psychological mark.