Gold holds above $1350 level, closer to 3-week tops

Analysis General

Published: 2/15/2018 9:10:00 AM
News


   •  Rising US bond yields capping additional gains.

   •  Weaker USD continues to lend support.

   •  Remains poised to extend the bullish momentum.

Gold stalled its mid-European retracement near $1350 level and has now moved back within striking distance of 3-week tops touched earlier.

Persistent US Dollar selling bias continues to underpin demand for dollar-denominated commodities - like gold. Moreover, the incoming US economic data has been pointing to a pickup in inflationary pressure and was further seen benefitting the commodity as a hedge against accelerating prices. 

Even firming expectations over additional Fed rate hike moves in 2018 did little to attract any fresh selling around the non-yielding yellow, albeit seems to have kept a lid on any further gains, at least for the time being.

Meanwhile, the market seems to have largely shrugged off today's mostly in line weekly jobless claims data, clearly indicating the underlying strength in the US labor market. Also better-than-expected Philly Fed Manufacturing Index was negated by softer Empire State Manufacturing Index and failed to provide any meaningful impetus.

Looking at the broader picture, the commodity seems to be facing some resistance near the $1358 region and hence, it would be prudent to wait for some follow-through strength, beyond the mentioned hurdle, before positioning for any additional gains.

Technical levels to watch

A clear breakthrough the mentioned hurdle is likely to accelerate the up-move towards $1366 level (Jan. high) before the commodity eventually darts towards testing $1374-75 supply zone.

On the flip side, sustained weakness below $1350 level might prompt some additional profit-taking slide and drag the metal back towards $1340 support area with some intermediate support near $1346-44 zone.



Tag: General
Source: FXSTREET
Views: 42 times

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