Spot gold completed a bullish weekly reversal last week off oversold levels

Spot gold completed a bullish weekly reversal last week off oversold levels. The gold bulls will be hoping for a closing break of $1250 (the 38.2% retracement of the October to December sell-off) this week. Short-term momentum suggests further upside could be seen and it will be interesting to see how gold fares if we get a strong US ISM services and factory orders print tonight (02:00 AEDT). Spot gold seems to have diverged a touch from the USD, especially after EUR/USD lost ground last week and closed through some strong support levels. With GSCI and Dow Jones commodity indices rebalancing today, we know that over 1 million ounces have to be bought for the re-weighting. Will gold continue to find buyers once the re-weighting has finished? That is a key question, especially with the US payrolls in focus this week.