Gold retreats from multi-month highs as USD recovers a bit

Gold witnessed a mild retracement from fresh multi-month tops touched on Thursday and is currently trading with mild negative bias around $1285 region.

Persistent geopolitical tensions and worries over the US relations with Russian and N. Korea continued supporting the precious metal's safe-haven investment appeal. The yellow metal also benefitted from overnight US Dollar slump in wake of the US President Donald Trump remarks that the US currency was too strong. 

   •  U.S. President Trump: USD is getting too strong - WSJ

Trump was also reportedly noted saying that he favored low-interest policy, which triggered a sharp fall in the US treasury bond yields and further buoyed the non-yielding yellow metal. 

     • U.S. President Trump likes "low-interest" rate policy - WSJ

The commodity subsequently rose to the highest level since Nov. 10 and has now confirmed a fresh break-out through the very important 200-day SMA hurdle. However, a minor greenback recovery during early European session seems to have prompted traders to lock-in some profits from near-term overbought conditions.

Today's US economic dataflow is unlikely to hinder the commodity's well-established bullish trajectory, albeit some additional profit taking, ahead of an extended weekend, still remains a distinct possibility. 

Technical levels to watch

A follow through retracement is likely to find immediate support near $1278 level, below which the metal is likely to head $1272 support (yesterday's low) ahead of $1267-66 important support. On the upside, momentum above $1288 level (multi-month highs) could get extended towards $1291-92 intermediate resistance before the commodity aims towards reclaiming the key $1300 psychological mark.