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Gold surrenders $ 1260 as USD strengthens, ignores risk-off

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 9, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Gold futures on Comex came under fresh selling pressure over the last hour, dropping sharply to hit fresh three-day low below $ 1260 barrier.

    Gold faces stiff resistance near 5-DMA

    Currently, gold drops -0.47% to 1257.30, quickly reversing a brief dip to 1255.30, fresh session lows. The bullion met strong selling pressure on its minor-recovery from steep losses seen overnight and dived deeper in the red as the US dollar picked-up considerable strength against its major peers. The USD index jumps 0.12% to 97.29, extending recovery from below 97 barrier.

    Further, the yellow metal continues to ignore the persistent risk-off trades amid falling Asian equities, while focus now remains on the Chinese CPI figures due tomorrow, especially after awful China trade data, which reinforced China slowdown fears into markets.

    Moreover, the losses in gold can be also attributed to the fresh round of profit-taking after the precious metal failed to take-out the psychological $ 1280 levels. While downward projection for the metal noted by Goldman Sachs, also dampened the sentiment around gold.

    Goldman Sachs noted, “The rally in gold could fizzle out as stronger U.S. data reignites a stalled dollar rally. Prices will head downward to $1,100 an ounce in the near term.”

    Gold Technical Levels

    The metal has an immediate resistance at 1265-66 (5-DMA/ daily high) and 1270 (round number). Meanwhile, the support stands at 1251/47 (10-DMA/ 1h 200-SMA) below which doors could open for 1245.
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