Gold clocks 10-day high above $1300
- Gold moved above $1,300, possibly due to risk aversion in the financial markets.
- The corrective rally could be short-lived if US stocks regain poise.
Currently, gold (XU/USD) is trading at $1,302/Oz, having clocked a ten-day high of $1,306 in the overnight trade.
The yellow metal picked up a bid yesterday, possibly due to renewed geopolitical tensions and the resulting risk aversion in the equity markets.
The US President Trump's decision to cancel the North Korea summit pushed both nations back into crisis mode. Consequently, the Dow Jones Industrial Average (DJIA) fell 75 points or 0.30 percent, stoking demand for the classic safe-haven assets like gold and the Japanese Yen.
Further, the sell-off in the European banking stocks may have also put a bid under the safe haven yellow metal.
Prices may fall back below the $1,300 mark if the major European indices trade on a positive note. The S&P 500 futures, up 0.30 percent, are already pointing to risk reset.
Gold Technical Levels
A move above the 100-hour MA hurdle of $1,304 would open up upside towards resistance at $1,308 (200-day MA). A close above that level would confirm a short-term bullish reversal and allow the rally to $$1,325 (May 11 high).
On the downside, break below $1,300 (psychological support + May 1 low) could yield a re-test of recent lows seen in the range of $1,287-$1,282.
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
