Gold downward spiral extends for eight consecutive session

Haresh Menghani FXStreet

On Friday, Gold extended its downward trajectory for eight consecutive trading session, its longest losing streak since Oct. 2015, to currently trade around 100-day SMA near $1215.

The precious metal, however, is trading above a nearly two-month low of $1211 touched earlier during Asian session.

Friday's fall in the yellow metal is over and above a sharp reversal on Thursday, when the metal initially attempted a recovery to $1234 that got sold into after hawkish comment from Fed Governor Jerome Powell. The yellow metal finally registered its lowest settlement since early April.

Prospects of a Fed rate-hike, sooner rather than later, have been the key factor weighing on the yellow metal since the beginning of this month, when it traded above $1300 mark for the first time since Jan. 2015. The bullion struggled to stay in positive territory during European session on Friday as well, but traders seem hesitant to carry their positions ahead of a holiday prolonged weekend and a speech by Federal Reserve Chairwoman Janet Yellen later during NY session.

Technical levels to watch

The metal is now headed for a fourth consecutive week of decline and a decisive close below 100-day SMA support near $1210 would mark its lowest weekly close since early Feb., indicating further downward momentum in the near-term. Sustained weakness below $1210 support now seems to open room for further depreciating move, even below $1200 round figure mark support, towards Feb. swing lows support near $1190 level.

Meanwhile on the upside, $1223-25 immediate resistance is followed by resistance near $1233-35 zone. Only a decisive move back above $1235 would increase prospects of any further recovery for the metal, possibly towards its next major resistance at 50-day SMA near $1250 region.

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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