Gold Climbs to Session High of $1275 ahead of US Retail Sales Data
Extending its bid tone, Gold
continues to gain traction and has now moved to session peak level of
$1275 just ahead of the US monthly retail sales and PPI release.
Against the backdrop of weak oil prices and weakness witness across global equity markets, gold turns out to a key beneficiary of boost in demand for safe-haven assets. Moreover, the US Dollar index (tracked by the US Dollar Index), which seems to lose some momentum at higher levels, is also supporting higher gold prices.
Of late, gold prices have witnessed some volatile moves as it failed to sustain its strength above $1300 mark and dropped back to the mid-point of $1200-$1300 range held since mid-Feb. The yellow metal, however, has now managed to bounce-off the upward trending 20-day SMA, possibly suggesting some upside in the near-term.
Despite of today's bounce the metal is still showing red on weekly candle. Investors now brace for a key update on US retail sector, monthly sales data, which although is unlikely to change the overall direction but has the potential to generate tradable moves in the commodity.
Technical levels to watch
On the immediate upside, $1278-80 area remains immediate resistance to watch-out for, which if cleared is likely to attract fresh bids and could lift the metal to $1287-88 horizontal resistance.
Alternatively, reversal from current levels and a subsequent weakness below $1270 is likely to drag it back towards day's through level at $1263, also coinciding with 20-day SMA. A convincing break below 20-day SMA now seems to increase its vulnerability to break below weekly lows support near $1257-56 and extend its weakening trend towards $1245-43 region support.