Gold Pauses After Hitting Three-Week High Level
Gold is seen retracing a bit from a 3-week high level of $1266 touched during Asian trading session on Thursday and is currently trading with only a marginal cut, at $1261.
Subsiding fears of an interest rate-hike by the US Federal Reserve, in the wake of last Friday’s disappointing May labor-market report, continues to drive the US Dollar lower and boosting appeal for the yellow metal. Given the slim chances of a Fed rate-hike at its monetary policy meeting on June 14-15, the precious metal gained further traction on Wednesday.
Meanwhile, weak Chinese inflation data seems to weigh on investor sentiment and prompting a profit-taking move on Thursday. Later during NA session, investors will confront the release of US weekly jobless claims that could provide some trading opportunity for gold traders.
Technical levels to watch
Although weakness below $1260 round figure might get extended but is likely to be limited at a previous strong resistance, now turned immediate strong support, around 50-day SMA near $1250-48 region. Intermediate support below $1260 is pegged near $1255 level.
Conversely, strength back above $1265 would suggest continuation of the upward trajectory with immediate upside target at $1276 ahead of key resistance near $1290-95 region.