Gold continues to trade above $1,630, near seven-year high set earlier
- Risk aversion helps safe-haven gold continue to gather strength.
- US Dollar Index pulls away from highs ahead of PMI data.
- 10-year US Treasury bond yield erases more than 1.5% on Friday.
After breaking above the critical $1,600 mark at the start of the week, the troy ounce of the precious metal extended its relentless rally and touched its highest level since February 2013 at $1,636.60 on Friday. With the market action turning subdued ahead of the American session, the XAU/USD pair is consolidating its gains near $1,635, where it was up 1% on the day.
Risk perception
The disappointing macroeconomic data releases from Japan and concerns over the coronavirus outbreak further weighing on the country's economic performance caused the JPY to lose its safe-haven status lately and allowed gold to gather strength on risk-off flows.
On coronavirus-related headlines, China's Politburo Standing Committee noted that the turning point of the coronavirus outbreak had not come yet and acknowledged that it would have an "obvious impact" on the economy at least in the near-term.
On the other hand, the greenback seems to be having a tough time finding demand on Friday after registering decisive gains against its major rivals throughout the week and helping the pair's bullish momentum remain intact. The last significant data release from the US will be the IHS Markit's preliminary Manufacturing and Services PMI data from the US. As of writing, the US Dollar Index was down 0.14% on the day at 99.74.
Technical levels to watch for