Gold clears key support, as Euro wipes out today’s gains

Gold has broken below key support as weaker Dollar in early European session failed to provide any support to Yellow metal. Dollar has bounced back sharply as New York session approached.

Euro has given up most of its today's gain as dollar bounced back sharply after initial jobless claims.

• US initial jobless claims came better than expected at 276,000 compared to prior 284,000. Continuing claims dropped sharply to 2.19 million from prior 2.23 million.

Euro is currently trading at 1.125, down from 1.138, as investors' again poured money into European bond market after yields reach highest level since mid-last year.

• German 10 year yield is down sharply trading at 0.83%, after touching as high as 0.992%.

For many, it has given renewed opportunity to buy bund at high yields.

Gold has broken crucial $1178 support, prior to the release of NFP report tomorrow. Move down further is very likely towards $1154 area.

EUR/USD faces crucial test tomorrow over NFP report. Euro bulls are hoping for a bad report to push the pair higher.