Gold Upside Seems Capped Near $1270
Gold seems to consolidate below $1270 level after registering a steep fall on Monday and is currently trading near 2-week low.
As
the US Dollar found renewed strength, gold has fallen in five out of
past six sessions, erasing all of the jobs data-fueled gains seen on
Friday last week. A firm dollar usually exerts pressure on
dollar-denominated assets such as gold. A further strength in the
greenback might continue to hurt appetite for the precious metal.
On
Tuesday, Gold attempted a recovery from sub-$1260 level but failed to
build on to the recovery momentum beyond $1268 level, representing 38.2%
Fibonacci retracement level o $1207-$1303 upswing, support break-point
turned immediate resistance. However, immediate downside also seems to
be limited by an important confluence support near $1257-55 area,
comprising of 20-day SMA and 50% Fibonacci retracement level.
Technical levels to watch
Recovery
momentum above 38.2% Fibonacci retracement level resistance near $1267
level seems to assist prices to move higher towards its next horizontal
resistance near $1277-78 region.
Meanwhile, weakness below
$1257-55 confluence support seems to drag it immediately below $1250
level before heading towards 61.8% Fibonacci retracement level support
near $1245-44 area.
