Gold sticks to tepid recovery gains, but remains capped below 100-DMA
Gold held on to its tepid recovery gains through early NA session, but has struggled to gain any follow through traction and remained capped below 100-day SMA.
Slight deterioration in investors’ appetite for riskier assets, as depicted by negative trading sentiment around equity markets, boosted demand for traditional safe-haven assets and helped the precious metal to snap six consecutive days of losing streak.
Despite of the minor pull-back, the precious metal held closer to near two-month lows touched on Tuesday amid growing expectations for an eventual Fed rate-hike action in June, which tends to drive flows away from the non-yielding metal.
Adding to this, today's US economic data, showing higher PPI and better-than-expected weekly jobless claims, further extended support to the greenback and weighed on dollar-denominated commodities - like gold. In fact, the key US Dollar Index held near three-week highs and was seen keeping a lid on the yellow metal's recovery move.
Technical levels to watch
Currently trading around $1221 level, 100-day SMA near $1224-25 region remains immediate strong hurdle, which if conquered could trigger a short-covering bounce towards $1235 horizontal level with some intermediate resistance near $1228 level.
On the flip side, $1217-15 area might continue to protect immediate downside, below which a fresh leg of selling pressure has the potential to continue dragging the commodity towards $1210 intermediate support en-route its next major support near $1205-04 area.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
