Gold Slides Further Below $1250 to a Four-Week Low

Gold Slides Further Below $1250 to a Four-Week Low

23 May 2016, 16:03
Roberto Jacobs
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Gold Slides Further Below $1250 to a Four-Week Low

As the greenback picked-up strength and some signs of stability in the European and US equity markets emerge, the perceived safe-haven, Gold, fell to its lowest level in four weeks.

Earlier during Asian session, led by risk-off sentiment the precious metal held its neck above $1250 mark and attempted a rebound to $1256. The recovery, however, was short-lived and got sold into, dragging the metal back below $1250 level and test $1243, its lowest level since April 28.

Moreover, renewed bid tone for the greenback also seems to contribute towards the metal's weakness on Monday, as has been the case since the beginning of this month.

Even from technical perspective, gold has now decisively broken below 50-day SMA support near $1250 and hence, remains vulnerable to continue drifting lower in the near-term.

Technical levels to watch

Below day's through level of $1243, the metal seems to continue drifting lower to test its next major support near $1233-32 area. Below $1233-32 support, the metal turns vulnerable to extend its down-slide towards its next major support near $1215 marking daily closing lows support touched in March and April.

Meanwhile on the upside, 50-day SMA support break-point near $1250 level, now seems to act as immediate resistance. This is closely followed by another strong horizontal resistance near $1256-58 area. Only a sustained move back above $1256-58 resistance might negate the near-term bearish outlook and assist the metal to appreciate further towards its next major resistance near $1272-75 area.


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