Gold drops to session lows near $1263 ahead of US data

Haresh Menghani FXStreet

Gold finally broke out of its consolidative trading range and retreated after refreshing fresh four week high level near $1270 region.

The latest comments by Dallas Fed President Robert Kaplan, foreseeing two more rate-hikes in 2017 provided some fresh boost to the US Dollar's modest up-move and was seen weighing on dollar-denominated commodities - like gold.

• Fed's Kaplan expects two more rate hikes in 2017 - CNBC

Adding to this, easing concerns over the Greek bailout talks, after clarification by the Greece Finance Minister Euclid Tsakalotos, further dented demand for traditional safe-haven assets and collaborated to the precious metal's downslide to fresh session lows near $1263 region.

Despite of the mildly weaker tone, the yellow metal is more likely to find some fresh buying interest amid political uncertainty in the UK, ahead of the general election on June 8, and escalating geopolitical tension in the Korean peninsula, especially after N. Korea warned of conducting more missile tests in the coming days.

Next on tap would be the US economic docket, featuring the release of Core PCE Price Index, Personal Income / Spending data and CB Consumer Confidence Index, which is likely to influence Fed rate-hike expectations and eventually provide some fresh impetus for the non-yielding metal.

Technical levels to watch

Immediate support is pegged near $1260 level, which if broken is likely to accelerate the slide back towards $1254-53 horizontal support en-route $1250-45 important support.

Meanwhile on the upside, $1270 level now seems to have emerged as immediate strong hurdle, above which the commodity is likely to dart towards $1275-76 intermediate resistance ahead of its next major hurdle near $1284 level.

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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