Gold drops after reaching a 3-week high amid a calmer market mood
|- The price of Gold has stabilized around $1,350 after reaching the highest level in February.
- Calmer markets support the consolidation.
The price of Gold is slightly higher today, at around $1,350. It had already reached a high of $1,356.98 earlier in the day, the highest levels in three weeks.
Calmer mood after the sharp drop in the US Dollar
The consolidation comes after the precious metal took advantage of the weakness of the US dollar on Wednesday. A sharp positive turnaround in share prices sent the dollar lower. The moves extended into Thursday.
The small correction from the highs comes despite a drop in US 10-Year Treasury Bond Yields, a correlation that is not at play.
Economic data coming out of the US was mostly positive. The Producer Price Index rose by 2.7% YoY in January, above expectations. Core PPI came out at 2.2%, also above forecasts. On the other hand, weekly Jobless Claims were within projections while Industrial Output dropped by 0.1%, falling short of expectations. The markets did not immediately react to the data.
The US economic calendar for tomorrow features two housing figures: Building Permits and Housing Starts. The last significant release for the week is the preliminary release of the University of Michigan's Consumer Sentiment Index for February. In addition, sentiment in broader financial markets remains of high importance.
Technical levels to watch on Gold
The price of Gold faces resistance at the aforementioned high of $1,356.98. A break above this level opens the door to resistance at $1,357.47 (Sep. 8, 2017, high) and then at $1,365.95 (Jan. 25 2018high).
On the downside, the first level to watch $1,348.43, today's low. Further below, the $1,324.14 level (Jan. 18 low), followed by $1,306.96 (Feb. 8 low) come to sight.
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