Gold moves off from multi-week highs post-US data

After refreshing its highest level since Feb. 27 at $1261.15, the precious metal surrendered some of its daily gains and is now being priced at $1256.20, still up $2.60 or 0.21% on the day.

Today's only relevant macro data from the United States revealed that the trade deficit shrunk more than expected in February. The goods and services deficit came in at $43.6 billion in February, down $4.6 billion from $48.2 billion in January. February imports fell by $4.3 billion while the exports dropped by $0.4 billion, narrowing down the overall deficit.

However, the yellow metal could extend the positive momentum in days to come as the participants will be waiting for the highly anticipated employment report on Friday. In case the non-farm figures are lower than the consensus, the investors could see that as a confirmation that the Fed would only go for two more rate hikes instead of three of four until the end of 2017.

Furthermore, President Trump is scheduled to meet with his Chinese counterpart President Xi Jinping on Thursday and Friday. Trump has warned earlier this week that the meeting would be "very difficult" and the investors could decide to stay closer to safer assets such as the yellow metal.

Technical outlook

A sustained rise above the daily high at $1261.15 could open the doors towards $1263.75 (Feb. 27 high). If the XAU/USD is able to move above this level, it would refresh the highest level since Trump's election victory and could target $1270 (horizontal level). On the flip side, $1245 (200-DMA) is seen as the first support followed by $1240 (20-DMA) and $1235 (50-DMA).

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