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 trade around $1214 region.
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.
Investors will remain focused on this week’s key macroeconomic releases from the US, including economic growth numbers (GDP) for the fourth quarter of 2016, which would provide fresh impetus for the greenback’s near-term direction and eventually drive dollar-denominated commodities – like gold.
Technical outlook
Carol Harmer, Founder at charmertradingacademy.com writes, “Gold is looking quite perky.....but there is the 1216/18 resistance that we have to overcome first...we are a bit vulnerable whilst the market is below here and we should take care...Now we know we have support in the 1206/04 area and we should therefore be buyers on this weakness...looking for the market to remain buoyant and try and test this 1216/18 resistance...Now Gold is only going to break higher if we can break this barrier...If we can we can head for 1224 and possibly the longer term 50% fib level located at 1229...”
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