Gold jumps to session high at $1340 on safe-haven demand

Haresh Menghani FXStreet

Having posted a session low at 50-day SMA near $1333-32 region, Gold managed to recover all of its losses and has now risen to a fresh session high.

Currently trading around $1340 region, the yellow metal is benefitting from the prevalent risk-aversion that seems to have gripped global equity markets on Monday, with most major US equity indices trading in negative territory with losses of over 0.5%.

Meanwhile, renewed selling pressure around the greenback, despite of better-than-expected new home sales data, is further extending support to dollar-denominated commodities, including gold. US new home sales for the month of August fell less-than-expected and came-in at 609K versus expected decline to 600K from 659K recorded in July.

Next in focus would be speeches by Fed Governor Daniel Tarullo and Dallas Fed President Rob Kaplan, which would be looked upon for fresh inputs over the Fed's next monetary policy move that would eventually determine the near-term trajectory for the greenback, eventually driving gold prices.

Technical levels to watch

Immediate resistance on the upside is pegged at $1343-44 zone above which the metal is likely to head towards $1350 resistance before extending its appreciating move towards its next major resistance near $1365 region. On the downside, immediate strong support is seen at $1330 region (50-day SMA), which if broken is likely to turn the commodity vulnerable to break through $1326-25 support and head towards testing $1310 important support.

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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