Gold Drops to Session Low of $1245 after Mixed US Data
Extending its downward trajectory, Gold has broken below 50-day SMA support near $1250 level to currently trade at $1245, near low point of the day.
As the greenback maintained its bid tone after the release of mixed US
economic data, the precious metal seems to face difficulty in
registering even a minor recovery from lower levels. According to the
data released just a short while ago, the number of individuals who
filed for unemployment related benefits during the past week dropped by
16,000 to 278,000, clearly pointing to the inherent strength in the US
labor market. Meanwhile, the Philly Fed manufacturing index dropped
further to negative 1.8 in May vs. negative 1.6 in April.
From technical perspective, the precious metal has now weakened below
its short-term moving averages (10, 20 & 50-day SMAs), suggesting
that the near-term selling pressure might continue for some more time.
Technical levels to watch
From current levels, the commodity seems to extend its fall towards
$1245 support, below which it could extend the depreciating move towards
$1232-32 horizontal support.
Conversely, momentum back above 50-day SMA ($1250 region) seems to
assist the metal to extend its bounce towards $1256-58 region. Any
further momentum beyond $1256-58 resistance might now be capped at the
trading range support break-point turned resistance near $1263-65 zone.
