Gold clocks five-month high in Asia

• Gold jumped to $1,251 in Asia - the highest level since July 11.
• Rising evidence of a global growth slowdown, trade fears, and the resulting risk aversion is likely helping gold report gains.
• Talk of Fed rate pause in 2019 is likely adding to the bullish tone around the yellow metal.

Gold rose to a six-month high of $1,251, having closed higher by 2.10 percent last week – its biggest weekly gain since March.

The safe-haven yellow is likely cheering an increasing evidence of a global growth slowdown and rising odds of Fed rate pause in 2019.

To start with, a section of the US yield curve inverted last week, triggering recession fears, which were bolstered by Friday's weaker-than-expected non-farm payrolls and wage growth release.

Further, China's export growth slowed sharply in November, highlighting a weakening global demand, Meanwhile, imports growth also decelerated, indicating anemic domestic demand.

Notably, the US-China trade war may escalate and the global outlook may further worsen in 2019 if the 90-day truce fails to produce a breakthrough deal.  More importantly, the odds of Fed rate pause in 2019 are rising amid the global growth slowdown and the resulting risk aversion.

So, for gold, the path of least resistance is to the higher side. That, however, may change if there the incoming US data pushes up Treasury yields and the US dollar.

At press time, gold is trading at $1,249 and the Dollar Index is trading at 96.41 – down 1.3 percent from the recent high of 97.69.  

Gold Technical Levels