Gold Higher at $1219 on Weak Dollar, ISM Data in Focus
Gold traded slightly higher at $1219 on Wednesday, hovering around 100-day SMA, led by safe-haven demand on weakness in global equities and the greenback.
On Tuesday, the precious metal extended its recovery from sub-$1200 level tested on Monday after the release of slightly weaker-than-expected economic data from the world's largest economy. US data released on Tuesday showed consumer confidence dipping and weakening economic activity in Chicago-area. The yellow metal finally ended the day with some minor gains for the first time in previous nine trading sessions.
Despite of its minor recovery on Tuesday, the yellow metal recorded a loss of 6% for the month of May. Rising expectations of a June Fed rate-hike weighed on gold prices since the beginning of May, when the precious metal touched $1300 mark for the first time since Jan. 2015.
Traders now seem to hold their nerves ahead of today's release of ISM manufacturing PMI data. Moreover, with the scheduled release of US monthly labor market report on Friday, the volatility is expected to remain elevated.
From technical perspective, the precious metal is attempting to move back above 100-day SMA, which if conquered should assist further recovery in the near-term.
Technical levels to watch
On a sustained trade above 100-day SMA resistance near $1219-20 region, the recovery momentum seems to get extended immediately towards $1225 resistance. Beyond $1225 resistance, the metal is likely to appreciate further towards retesting 50-day SMA strong support, turned resistance, near $1245-47 region.
On the flip side, failure to clear 100-day SMA hurdle and a reversal back below $1215 immediate support should expose the very important $1200 psychological mark support.