Gold - Off 20-1/2 week low, but 1H 50-MA caps recovery
- Technical recovery in gold stalls near 1-hour 50-MA.
- Focus on Fed.
Gold's recovery from the low of $1240 has run of out of steam near the 1-hour 50-MA despite flat action in the dollar index.
As of writing, the yellow metal is at $1243 levels; down 0.20 percent on the day.
The metal has been steadily losing altitude since late November, which indicates the markets may have priced-in the Fed rate hike. Consequently, gold may regain the bid tone following the rate hike announcement (buy the fact).
However, a hawkish dot chart (interest rate forecast) could yield another leg lower in the yellow metal. As for today, the US Nov. producer price index (PPI) may not have a big impact on the yields and gold.
Gold Technical Levels
Adam Button from AshrafLaidi.com writes, "technically, the trend is increasingly weak. Last week, gold broke below the October low of $1260 and slid another $12 to $1240 on Monday. The July low of $1200 is a major support level that needs to hold if gold is going to rebound in the months ahead. If not, it could get ugly for the old-fashioned analog store of value.
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
