Gold consolidates post-FOMC upsurge to multi-month tops, around $1320

   •  Dovish Fed/sliding US bond yields kept the USD bulls on the defensive.
   •  Risk-on mood denting safe-haven demand and capping further up-move.
   •  Focus now shifts to Friday’s release of the keenly watched US jobs report.

Gold extended its sideways consolidative price action and remained within striking distance of 8-1/2 month tops set in the previous session.

The precious metal built on its recent bullish trajectory and extended the momentum further beyond the key $1300 psychological mark after the Fed, in its first policy update of the year on Wednesday, said it would be patient in raising rates this year.

The Fed also surprised investors by issuing a separate statement regarding its balance sheet and indicated that its efforts to reduce the $4 trillion asset portfolio could end sooner than expected if the economic situation or financial markets deteriorated.

A dovish pause triggered a broad-based US Dollar selloff, which remained unabated through the early European session on Thursday and was seen as one of the key factors underpinning demand for the dollar-denominated commodity.

This coupled with a follow-through slide in the US Treasury bond yields extended some additional support to the non-yielding yellow metal, though the prevalent risk-on mood, which tends to dampen demand for traditional safe-haven assets, kept a lid on any further up-move. 

Moving ahead, today's relatively thin US economic docket, featuring the release of usual initial weekly jobless claims and Chicago PMI, will be looked upon for some trading opportunities but the key focus will be on Friday’s keenly watched US monthly jobs report (NFP).

Technical levels to watch

Immediate resistance is pegged near mid-May 2018 swing high, around the $1325-26 region, above which the momentum could further get extended towards $1333 horizontal level. On the flip side, $1314 zone now seems to protect the immediate downside, which if broken might prompt some profit-taking and drag the commodity back towards the $1302-$1300 region.