Gold bounces off weekly lows, turns higher post-US GDP

   •  US Q2 economic growth stood at 4.1% annualized pace, mostly in-line.
   •  Post-data modest USD retracement helps to bounce off weekly lows.
   •  A sharp slide in the US bond yields provides an additional boost.

Gold reversed an early dip to fresh weekly lows and has now moved into positive territory following the release of in-line US GDP growth figures. 

According to the advance estimates, the US economy is anticipated to have grown by 4.1% annualized pace during the second quarter of 2018, better than an upwardly revised reading of 2.2% recorded in the previous quarter. 

The headline reading, however, seems to have disappointed market participants, especially after the White House leak on Monday that pointed to a growth rate of 4.8% and prompted a modest US Dollar weakness, which eventually provided a minor lift to the dollar-denominated commodity.

This coupled with a knee-jerk slide in the US Treasury bond yields provided an additional boost to the non-yielding yellow metal, albeit prospects for gradual Fed rate hike moves through the end of this year might continue to keep a lid on any meaningful up-move.

Moreover, the prevalent risk-on mood, as depicted by buoyant trading sentiment around equity markets and which tends to dampen demand for traditional safe-haven assets, might further contribute towards capping gains for the precious metal. 

Technical levels to watch

Any subsequent up-move beyond $1224 level is likely to get extended towards $1231 horizontal resistance en-route $1235 supply zone. On the flip side, the $1218 area now seems to have emerged as an immediate support, which if broken seems to accelerate the fall back towards YTD lows, around the $1212-11 region.