Despite of the risk-on rally across global equity markets, Gold is seen reversing some of its previous day's losses and is currently trading around $1321 region as uncertainty surrounding economic implication of the Brexit referendum continues to boost the safe-haven demand for the precious metal.
On Tuesday, the yellow metal dropped to $1305 and ignored broad US Dollar weakness as profit taking kicked-in following two days of Brexit led sharp up-surge. Moreover, recovery in the US Dollar led by better-than-expected US GDP and Consumer Confidence data further dented demand for the precious metal.
On Wednesday, the bullion resumed with its bullish momentum on lingering concerns over the political and economic uncertainty on the back of last week's historic EU referendum in the UK as investors remained focused on additional comments from the second day of EU council meeting.
Traders will also pay attention to some important US releases, which includes - the Federal Reserve's preferred inflation gauge, core PCE price index, personal spending and pending home sales data, which would provide additional cues for the near-term momentum in gold prices.
Technical levels to watch
From current levels, $1325-30 area seems to act as immediate resistance, which if cleared should assist the metal to extend its bullish momentum. Above $1325-30 resistance the metal seems to head towards retesting Friday's swing high resistance near $1358. Strong buying interest above $1358-60 seems to boost it further towards 2014 yearly highs resistance near $1390-95 area.
Conversely, reversal from current resistance area and a subsequent break below $1300 level now seems to trigger a near-term corrective move, dragging the commodity initially towards $1275 intermediate support before heading towards 50-day SMA support, currently around $1260 region.
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