Gold off-lows, flirts with $ 1250 ahead of ECB

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 10, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    Gold futures on Comex extendslosses for the third straight session and hover near five-day lows as the US dollar remains strongly bid across the board heading into the ECB decision.

    Gold recovers 1245.80, session lows

    Currently, gold drops -0.60% to 1250, with the bulls trying hard to extend beyond the last. The bullion has been tracking the price-action in the EUR/USD pair so far this week, and has retreated sharply from 13-month tops reached near 1280 levels.

    The prices remain weak as the euro continues to weaken versus the US dollar ahead of the ECB event, and thereby underpins the rally in the USD across the board. Markets have already priced-in the ECB to slash the deposit rate by 10 bps to -0.40% from -0.30% previous. Meanwhile, the US dollar index rises 0.20% to 97.40 levels.

    However, the yellow metal seems to find fresh bids on every attempt towards 1240 zone as fading rate hike bets next week, keeps sentiment underpinned. While holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, have recovered slightly to 25.49 million ounces on Wednesday, further cushioning the downside in the metal.

    Gold Technical Levels

    The metal has an immediate resistance at 1259/63 (5-DMA/ 1h 100-SMA) and 1270 (round number). Meanwhile, the support stands at 1246/44 (daily S1/ Mar 9 Low) below which doors could open for 1240.
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