Gold jumps to 8-week high ahead of Brexit speech

Gold extended bullish break-out momentum above 50-day SMA hurdle and touched nearly 8-week high amid persistent worries over Brexit.

Currently trading around $1214 region, spot gained fresh traction on Tuesday and rose to the highest level since Nov. 23 amid prevalent risk-off mood ahead of the much awaited speech by UK Prime Minister Theresa May, where she is expected to unveil her plans for negotiating Britain's exit from the European Union.

Meanwhile, receding market expectations over prospects of stronger US economic growth, led by aggressive fiscal stimulus measures by the incoming Trump administration, is weighing heavily on the US Dollar and boosting demand for dollar-denominated commodities - like gold. 

Moreover, bearish sentiment surrounding European equity market is further lending support to traditional safe-haven assets and contributing to the strong bid tone surrounding the precious metal.

Tuesday's key focus would remain on May's speech on Brexit, which would drive market risk sentiment and provide fresh impetus for the yellow metal.

Technical levels to watch

A follow through momentum above $1215 level is likely to confront resistance near $1221 area (Nov. 22 high) above which the commodity seems all set to head towards its next hurdle near $1230 zone ahead of 100-day SMA resistance near $1240 region.

On the downside, $1205 level now becomes immediate support to defend, which if broken is likely to drag the metal back below $1200 handle, towards testing 50-day SMA resistance break, now turned support, near $1185-83 region.