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· Gold hangs near weekly lows, just below $1935 level

Gold refreshed weekly lows during the early European session, albeit lacked any strong follow-through selling and quickly recovered a bit thereafter.

Gold: Technical outlook favors bears in the short-term

“An hourly closing below the $1944 has confirmed the bearish breakdown, opening floors for a test of last week’s low of $1903. The bulls, however, could be offered some temporary respite near Wednesday’s low of $1932.72. The next relevant cushion comes in around the $1925 region, last Friday’s low.”

“Should the price manage to resist above $1925, a bounce-back towards the robust support now resistance at $1944 will be on the cards. The buyers will then aim for the key $1950 barrier, the convergence of the horizontal 200-hourly Simple Moving Average (HMA) and bearish 21-HMA.”

“The hourly Relative Strength Index (RSI) points south while below the midline, suggesting more scope to the downside.”

· Gold on Thursday recouped some of the previous session’s hefty losses as the dollar steadied, although gains were capped by an uptick in risk appetite on recent better-than-expected economic data.

· Spot gold was up 0.2% at $1,945.59 per ounce by 0340 GMT, after falling 1.4% on Wednesday in its biggest one-day drop since August 19 on a firmer dollar and rebound in U.S. manufacturing activity.

· U.S. gold futures rose 0.4% to $1,952.20.

· “Gold is tracking inversely the moves in the dollar... and part of the reason gold has not capitalized as much after Jackson Hole is risk appetite seems strong,” said DailyFx currency strategist Ilya Spivak.

· “Although there is positive growth, the overall economy is still very very weak in absolute terms and central banks are expected to remain dovish, which should be supportive for gold.”

· The dollar index held steady against a basket of major currencies after rising 0.6% in the last session.

· Meanwhile, data showing a sustained recovery in China’s services sector and the prospect of additional U.S. stimulus whetted risk appetite, limiting gold’s appeal.

· The U.S. Federal Reserve, in its “Beige Book” report, highlighted that U.S. business activity and employment ticked up through late August, but economic growth was generally sluggish as Covid-19 hotspots hampered reopening efforts.

· Gold has gained about 28% so far this year, helped by ultra-loose monetary policy adopted by major central banks to mitigate the economic damage caused by the Covid-19 outbreak, which has infected nearly 26 million people worldwide so far.

· Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

· Investors now await the initial weekly U.S. jobless claims report due later in the day, as well as U.S. payroll figures on Friday, for future direction.

· Elsewhere, silver gained 0.1% to $27.52 per ounce and platinum rose 0.5% to $910.47, while palladium eased 0.1% to $2,244.76.

Reference: CNBC, FXStreet