Gold: Bears target $1263 amid broad USD demand
- Greenback strength erodes the bullion’s safe-haven demand.
- The US Dollar (USD) is likely cheering upbeat data and rising equities at home that contrasts to sluggish outcome abroad.
Gold is on the rounds near $1269 ahead of European open on Wednesday. The yellow metal dropped to the year’s low on Tuesday after global traders were welcomed by upbeat US data and rising equities when they returned from Easter break.
The US new home sales grew more than 0.650 million forecasts to 0.692 million with the change in percentage terms beating -2.5% market consensus with +4.5% rise.
Global equity markets were also on the rise after positive results from Twitter and Coca Cola buoyed trade sentiment. The S&P 500 posted record close whereas DJIA and Nasdaq also grew more than 0.5%.
The greenback favor was carried forward during early Wednesday when quarterly Aussie CPI data disappointed global markets with 0.0% QoQ readout versus 0.2% forecast and 0.5% prior.
The US 10-year government bond yields generally have a negative correlation to gold prices and are presently unchanged around 2.56%.
Looking forward, risk events like Brexit, the US-China trade deal and geopolitical plays surrounding North Korea, Syria and Libya are likely to entertain the metal traders.
Gold Technical Analysis
Considering 12-day old descending trend-line, the bullion may extend its downside but an eight-month-long upward sloping support-line at $1263 might challenge bears, which if broken could recall $1260 and $1257 ahead of highlighting 200-day simple moving average (SMA) near $1250.
Meanwhile, $1273 trend-line resistance, $1278 and $1281 may limit the quote’s nearby upside, a break of which can shift buyers’ attention to 100-day SMA level of $1291.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
