XAU/USD (gold price in terms of USD) kept the upbeat tone intact and finished higher on Thursday, settling at 1233.58. The prices bounced-off a dip to 5-DMA near 1225 following the release of much stronger-than expected US durable goods data, which sparked a rally in the USD across the board. The US durable goods orders for January improved notably to 4.9% from -4.6% in December. The ex-transport measure also increased to 1.8% from -0.7%. While the rebound seen in the US equities also poured cold water on the bullion upward momentum and sent the prices lower. However, gold managed to recover ground towards close and ended well above 5-DMA support.
As for today’s trade, the gold prices are seen retreating, having failed once again near Thursday’s high at $ 1143.19. The pair now drops to session lows around 1232 region as the safe-haven bids for the bullion have diminished on the back of a sharp rebound in the European stocks. Moreover, markets are locking-in gains on their gold longs and readjusting positions ahead of the main risk event for this week, the US Q4 preliminary GDP estimate. Markets are predicting the US growth to increase annualized 0.4% in Q4 2015 - slowest since the contraction in Q1 2014. Hence, the correction is likely to remain short-lived as the XAU bulls will jump back following dismal GDP report, which will intensify dwindling bets of further rate rises this year.
Technicals – Poor GDP figures could push gold to $ 1260
A sharp upward price move is expected any time soon as the technical picture favours the bullion in the near to medium-term horizon. Gold on daily charts absolutely looks poised for another leg higher, reflected by the ‘Golden Crossover.’ The 50-DMA has broken above the 200-DMA from below, resulting in the golden crossover. So to speak, intraday, the prices might extend the corrective slide till 1225 level, near 5-DMA and hourly 100-SMA confluence. At the last, bulls are expected to jump into the bids and drive the rebound in the prices towards 1240-45 levels. A decisive break beyond the last would bring the yearly highs near 1260 back on sight. Fundamentally, such a move could be fuelled by disappointing US GDP figures.
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