Gold stages a goodish recovery after yesterday’s slump to one-month low
Gold staged a goodish recovery on Tuesday and recovered part previous session's sharp fall to over one-month lows, near the very important 200-day SMA.
Currently trading around $1250 region, the precious metal benefitted from a mildly weaker tone surrounding the greenback. Yesterday's downbeat US durable goods orders data signaled a slowdown in the manufacturing sector and held investors back from buying the US Dollar, which was eventually seen boosting demand for dollar-denominated commodities - like gold.
Adding to this, a slight deterioration in investors' risk appetite, as depicted by weaker opening in the European equity markets, provided an additional boost to the yellow metal's safe-haven appeal and collaborated to the ongoing recovery move of over 1% from yesterday's swing lows to the lowest level since May 17.
Investors now turn their attention to much awaited speech by the Fed Chair Janet Yellen, due later during the NY trading session, for fresh insight over the central bank's monetary policy outlook, which would eventually provide some fresh impetus for the non-yielding commodity.
• US: Economy faced with inflation slump? - AmpGFX
Technical levels to watch
Any further recovery now seems to confront strong resistance near $1255-56 region, above which a fresh bout of short-covering has the potential to continue lifting the metal further beyond $1260 level towards its next resistance near $1265-66 region.
On the flip side, $1244 level now seems to protect immediate downside, which if broken could drag the metal back towards 200-day SMA support near $1236-35 region.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
