Gold Pulls-Back to $1241, 50-DMA Caps Upside
Gold lost some steam on Tuesday and is seen pulling-back from 50-day SMA resistance to currently trade around $1242 level as investors seem to take some profits off the table after Friday's big up-surge.
The precious metal seems to consolidate at higher levels as investors now await for further clarity on the timing of next Fed rate-hike move.
On Monday, the yellow metal got a slight boost after the Federal Reserve Chairwoman Janet Yellen, in her speech, failed to provide any clues over the specific timing for the Fed’s next interest-rate action. The Fed Chair, however, confirmed that the US economic recovery remained on track for a gradual rise in interest rates.
The metal, which had remained under pressure throughout the month of May gained traction after Friday's awful NFP print. Moreover, with fading prospects of a Fed rate-hike in June/July might continue to extend support to the precious metal in the near-term.
Technical levels to watch
Reversal from 50-day SMA resistance is likely to find immediate support around $1230 level. Dips below $1230 level are likely to get bought into and hence is likely to be limited by 100-day SMA support near $1222-20 region.
On the flip side, momentum above 50-day SMA resistance ($1246-47) is likely to get extended towards $1265 horizontal resistance, beyond which the commodity seems all set to continue with its near-term upward trajectory towards $1290-92 resistance area and move closer towards reclaiming $1300 mark.