Gold clocks three-day high, nears key fib hurdle
|The Manchester explosion and the resulting risk-off pushed gold to a three-day high of $1263.46 levels.
The session high almost coincides with the critical 61.8% fib retracement of the April low and the March high - $1264. 50.
The Greater Manchester Policy is treating the explosion as a terrorist incident until they know otherwise. UK PM May has condemned the blast and said they are working to establish the full details of the incident.
Meanwhile, Trump administration has proposed major cuts to social spending program and massive tax cuts that will boost the economic growth. However, the plan is likely to be rejected by Congress. Hence, the proposal has not had any impact on the yellow metal. Furthermore, the CME FedWatch’s June rate hike probability stands unchanged at 78.5%.
The metal may remain well bid and could jump above $1264.50 (61.8% Fib R) if the European stock markets react negatively to Manchester incident.
Gold Technical Levels
The metal was last seen trading around $1262/Oz. A break above $1264.50 (61.8% Fib R of Apr low - May high) would open doors for $1274.07 (Apr 19 low) and $1278.11 (78.6% Fib R of Apr low - May high). On the downside, break below $1259.50 (session low) could yield a pull back to $1252.53 (50-DMA) and $1243.65 (100-DMA).
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