Gold Rises Above $1250 to a Fresh 2-Week High Level
Following a minor pull back on Tuesday, dimming expectations of a Fed rate-hike continued assisting Gold to inch higher on Wednesday to currently trade above 50-day SMA resistance at a fresh 2-week high level of $1251.
On Tuesday, the precious metal pulled-back from 50-day SMA and dropped to $1235 before settling marginally lower at $1244 as investors now evaluate the possibilities of a Fed rate-hike in July.
Given the uncertainty surrounding the upcoming EU referendum in the UK on June 23 coupled with dismal US employment numbers for the month of May, markets have already discounted that the US central bank is unlikely to raise interest-rates this month. Diminishing expectations of a June interest-rate-hike has helped restrict any swift recovery for the greenback and thus boosting demand from dollar-denominated commodities like gold.
Meanwhile, Chinese imports data, indicating that the domestic demand in the world's second-largest economy might be recovering, supported minor risk-on rally for the yellow metal.
With an empty economic docket on Wednesday, the metal is likely to continue benefiting from weaker US dollar and buoyant equities on increase in risk appetite.
Technical levels to watch
Sustained momentum above 50-day SMA is likely to get extended towards $1265 horizontal resistance, above which the commodity seems to extend its near-term upward trajectory towards $1290-92 horizontal resistance and move one step closer towards reclaiming $1300 handle.
On the flip side, reversal back below 50-day SMA resistance turned support near $1246-45 region, now seems to find immediate support around $1230 level. Weakness below $1230 level is likely to get bought into and hence is likely to be limited by 100-day SMA support near $1222-20 region.