Gold trades back above $1300/oz as it continues to recover from the near-5% correction that took it close to, but not through, key support at the $1,275/oz level last week. The bounce that kicked off last Friday following the weak US jobs report is currently being supported by a weaker dollar as another failed attempt to break higher has attracted selling interest. Additional support has come from renewed strength in US bonds in response to softer US CPI and strong demand at yesterday’s 10-year T-Note auction when the yield touched 2.6%, the lowest since early January.
Having broken back above $1,300/oz, technical traders will now be focusing on the yellow metal's ability to challenge resistance at $1,314/oz and more importantly $1,322/oz. A break above the latter could signal the end of the correction from a technical perspective and mark the beginning of a fresh attempt to challenge the $1,350/oz level.