Gold Turns Lower to Test 50-DMA

Gold Turns Lower to Test 50-DMA

23 May 2016, 13:42
Roberto Jacobs
0
19

Gold Turns Lower to Test 50-DMA

Gold erased Asian session-gains and fell back in the red zone as the US dollar picked-up strength amid broad based sell-off seen across the financial markets.

Gold hovers around $ 1250 mark

Currently, gold trades -0.15% lower at 1249.71 in close proximity to daily lows struck at 1249.42, having breached 50-DMA support located at 1249.90. The bullion's recovery mode lost legs near 1255-56 levels and the prices turned lower once again, despite negative European equities and oil-price sell-off, as markets continue to price-in a June Fed rate hike amid renewed optimism on the US growth outlook.

Moreover, a stronger greenback against most major currencies, viz., the EUR, GBP, AUD etc., also weighed on the yellow metal. A stronger US dollar makes the dollar-denominated gold more expensive for the holders in other currencies. Markets now digest FOMC member Bullard’s comments ahead of the US flash manufacturing PMI data due later in the American session.

Gold Technical Levels

The metal has an immediate resistance at 1260 (round figure) and 1266 (20-DMA). Meanwhile, the support stands at 1243.81 (May 19 Low) below which doors could open for 1237.45 (Apr 28 Low).


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