Gold testing fresh 3-week lows near $1,260/oz

Pablo Piovano FXStreet

The selling pressure around the precious metal stays unabated today, dragging the ounce troy to test multi-week lows in the $1,260 area.

Gold offered after the FOMC

The demand for the safe haven metal continues to dwindle today following the Fed’s decision to hike the Fed Funds target range by 25 bp to 1.00%-1.25% on Wednesday, matching the broad consensus.

Bullion reverted yesteday’s advance amidst renewed buying interest surrounding the greenback, lifting the US Dollar Index to 4-day tops above 97.30 after clinching fresh 2017 lows near 96.30 in response to lacklustre results from US inflation figures in May.

Gold is suffering the tone of the Committee after it left the door open for a third rate hike in H2 1017 and the likely start of the reduction of the Fed’s balance sheet at some point in the near term.

Looking ahead, the buck should stay in centre stage in light of the releases of Initial Claims seconded by the more relevant Philly Fed manufacturing index for the month of June, May’s industrial production and capacity utilization as well as the NAHB index and TIC flows.

Gold key levels

As of writing Gold is retreating 1.61% at $1,261.81 and a breach of $1,256.55 (50% Fibo of the May-June up move) would aim for $1,248.00 (100-day sma) and finally $1,237.99 (200-day sma). On the other hand, the next resistance emerges at $1,284.20 (spike pre-FOMC Jun.14) seconded by $1,291.50 (high Jun.8) and then $1,298.80 (2017 high Jun.6).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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