Gold saved around 200 SMA; sellers targeting 1200 handle

Currently, Gold is trading at 1209.42, down -0.72% on the day, having posted a daily high at 1220.26 and low at 1206.73.

Today's $14.00 pullback in Gold, according to market sources is due to 'profit taking.' Investors and traders around the world had to work around two notable risk-events; the UK's Supreme Court ruling against the UK Government, and later, Trump's advanced approval in regards to the Keystone XL and Dakota Access hit the wires. 

Gold demand in India; back in 2018

Bloomberg reports, "Gold consumption in India won’t return to normal levels until 2018, delaying a forecast recovery from a seven-year low, as a liquidity squeeze tightens spending this year in the world’s largest consumer after China, according to the World Gold Council."

The report continues, "This year “has a lot of uncertainties,” P.R. Somasundaram, managing director for the council in India, said by phone from Mumbai. The government’s move to ban high denomination currency is keeping demand muted, while further uncertainty is expected from a proposed uniform goods and services tax and a plan to standardize the quality of jewelry, he said."

What goes up...

Haresh Menghani, Analyst at FXStreet, notes, "Gold snapped three consecutive days of winning streak and traded with bearish bias through European session on Tuesday, albeit has bounced off session lows to currently traded around $1214 region."

He further writes, "Broad-based US Dollar recovery, backed by a rebound in the US treasury bond yields, seems to be only factor leading to the ongoing profit taking slide around the precious metal. Moreover, positive sentiment surrounding riskier space - like equities, is also denting demand for the yellow metal's safe-haven investment appeal. However, lingering concerns over the US President Donald Trump’s protectionist stance and lack of details over his fiscal stimulus plans might continue to weigh on investor sentiment and limit any immediate sharp downslide for gold."

Technical levels to watch

In terms of technical levels, upside barriers are aligned at 1220 (today's high) and above that at 1236 (100-DMA). While supports are aligned at 1206 (200-SMA) and below that at 1200 (psychological support). On the other hand, Stochastic Oscillators move away from the oversold territory which serves as evidence, at least in the short-term, that the metal may recover some ground. If prices close and open below the 200-SMA, the selling pressure would drag the 'safe-haven' lower towards the next logical region; 1200-1195 or lower.

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