XAU/USD (gold price in terms of USD) kicked-off the week on a bullish note, resuming its recent winning-streak after a temporary reversal seen on Friday. The prices rebounded sharply from the US Q4 GDP induced sharp losses and rose as high as 1241.77 after another round of easing by the Chinese central bank in a bid to spur growth in the world’s top gold consumer. The PBOC slashed the RRR by 0.50%, effective March 1. In addition, the prevalent risk-off sentiment amid falling global equities also boosted the safe-haven bids for the bullion. As explained the day earlier, the prices displayed a bullish falling wedge break and regained almost $ 20 intraday, closing the day near daily highs above 1240 levels.
Gold prices added to the previously rally this Tuesday, having posted daily highs posted at 1248.50 in Asia. The prices are currently making minor-recovery attempts from 1236.61 session lows, and struggles around 1239. The bullion extends its retreat into Europe as markets resorted to profit-taking after the prices failed to take out 1250 barrier. Moreover, the risk-on sentiment persisting amid rallying European stocks lift the demand for riskier assets at the expense of the safe-haven gold. While markets also refraining from placing big bets on gold ahead of the manufacturing PMI reports from the US due later in the NY session. The ISM manufacturing PMI is expected to have improved to 48.5 in Feb versus 48.2 last, while PMI gauge from Markit is expected to remain unchanged at 51.0.
Technicals – Upbeat ISM could push gold to $ 1230-25
The technicals continue to paint a bullish picture for gold, with the golden crossover on the daily chart confirming further upside ahead. The prices hovers above 1240 levels, placed well above the upward sloping 5-DMA support located at 1232.11. A break of the last, the prices could drop further to 1226.42, where the bullish 20-DMA stands. The bulls may find fresh bids near the last and swung back higher to resume its recent upside momentum. To the topside, the next resistance is seen at 1248.50 – daily highs, beyond which 1260 will be back on sight. A daily closing above 1250 barrier is needed to confirm further upside.
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