Gold rebounds in Asia amid flight to safety

Dhwani Mehta FXStreet

Gold futures on Comex reversed a part of Friday’s losses and resumed its recent bullish streak as risk-off sentiment returned to markets amid China stocks slump.

Gold holds above $ 1220

Currently, gold trades 0.33% higher at 1224.40, easing-off session highs reached at 1227.20. The precious metal found fresh bids near 1220 region and swung back into the positive territory this Monday after the Chinese equities dragged the Asian markets lower and reinforced risk-off moods into markets. China’s benchmark, the Shanghai Composite index plunges over 3%, at the moment.

Moreover, the conclusion of the G20 meeting and former-BOE chief’s comments also spooked markets and hence, investors ran for cover in the traditional safe-haven gold. Moreover, increasing money flows into the bullion also keep the prices underpinned. Hedge funds and money managers raised their bullish stances in COMEX gold to a one-year high in the week to Feb. 23, CFTC data showed.

On Friday, gold slumped 1% after the US GDP came in stronger and added to the recent series of upbeat US data, suggesting that the US economy is back on recovery track and calls for further rate rises by the Fed.

Looking ahead, this week is of importance for the gold, as we have a raft of major economic releases worldwide, which includes the Chinese manufacturing PMIs and US NFP report.

Gold Technical Levels

The metal has an immediate resistance at 1230 (psychological levels) and 1239.10 (Feb 26 High). Meanwhile, the support stands at 1222.30/22 (1h 200-SMA/ 200-DMA) below which doors could open for 1218 (20-DMA).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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