Gold continues to scale new multi-month highs, fast approaching 200-DMA

Haresh Menghani FXStreet

Gold continued scaling higher and jumped to fres multi-month highs, all set to post fourth consecutive week of gains.

Currently trading around $1257 region, a fresh wave of global risk-aversion trade, with major European equity indices trading with losses in excess of 1.0%, boosted demand for traditional safe-haven assets and lend additional support to the precious metal's ongoing bullish momentum to the highest level since Nov. 11.

In addition to this, continuous decline in the US treasury bond yields undermined the US Dollar demand and is supportive of the strong bid tone surrounding dollar-denominated commodities - like gold.

Later during NY session, the US economic docket - new home sales and Revised UoM Consumer Sentiment index, would be looked upon for short-term trading opportunities. Meanwhile, next week's influential speeches by the US President Donald Trump on Tuesday and the Fed Chair Janet Yellen on Friday would now be key determinants of the metal's next leg of directional move.

Technical levels to watch

From current levels, the very important 200-day SMA near $1261 level is likely to act as immediate hurdle, which if cleared decisively is likely to accelerate the up-move towards $1276 horizontal resistance with some intermediate resistance near $1268 level.

On the downside, any retracement might now find fresh buying interest near $1250 support area and hence, further weakness now seems to be limited near $1242-41 support area.

1. R3 1254.33
2. R2 1246.59
3. R1 1240.89
PP 1233.15
1. S1 1227.45
2. S2 1219.71
3. S3 1214.01

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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