Gold inched higher and touched a fresh six week high during early European session on Wednesday.
Currently hovering around immediate strong hurdle near $1190 region, 50-day SMA, renewed 'hard Brexit' concerns and uncertainty ahead of Donald Trump's first news conference was seen benefiting the precious metal's safe-haven appeal.
The yellow metal tends to benefit as an alternative investment during times of economic and political uncertainty. Hence, Friday's corrective slide, in wake of upbeat jobs report from the US, turned out to a buying opportunity for bargain hunters amid increasing possibilities of a 'hard Brexit' and cautious sentiment surrounding the US equity markets.
Meanwhile, a mildly positive sentiment surrounding the US Dollar was seen hindering further upside as a stronger greenback tends to weigh on dollar-denominated commodities - like gold.
Investors on Wednesday eagerly await for details on Trump administration's proposed fiscal spending plans, which is expected to infuse a fresh bout of volatility in the greenback and eventually provide fresh impetus for gold prices.
Technical levels to watch
A convincing break through 50-day SMA resistance should lift the commodity immediately towards $1197 (Nov. 28 high) ahead of $1200 psychological mark. A follow through buying interest has the potential to continue boosting the metal further towards $1215 resistance area (Nov. 23 high).
On the downside, $1186 level now becomes immediate support, which is followed by a support near $1180 region. On a sustained weakness below $1180 support is likely to accelerate the corrective slide towards $1170 horizontal support, en-route its next major support near $1160-58 region.
- R3 1203.48
- R2 1197.05
- R1 1192.27
- PP 1185.84
- S1 1181.06
- S2 1174.63
- S3 1169.85