By Fast Brokers – Gold is fluctuating around $1225/oz as investors decide whether to take the recent FX risk rally a step higher. Gains in major dollar pairs were capped yesterday despite large gains in U.S. equities, meaning investors aren’t sold on the rally in the S&P since there was unsubstantial news and/or fundamentals backing a pop of that size. However, investors will receive a wealth of data over the next two trading sessions, meaning the risk trade could be at a make or break point for the near-term. We’ve got services PMI data from both the UK and U.S. on deck along with UK HPI and advance U.S. employment figures. It will be interesting to see how gold behaves over the next 24 hours, particularly if gains in the risk trade accelerate. Although gold has proven a worthy safe haven investment vehicle, the precious metal also tends to exhibit a negative correlation with the greenback during risk rallies. Hence, gold may still be in a win-win position regardless of the outcome.
Technically speaking, gold faces technical barriers in the form of intraday and 5/17 highs. Additionally, the psychological $1250/oz level should serve as a solid technical barrier should it be reached. As for the downside, gold has multiple uptrend lines serving as technical cushions along with 6/1 and 5/28 lows. Furthermore, the psychological $1200/oz area now becomes a technical cushion.
Present Price: $1222/ oz
Resistances: $1225.20/oz, $1227.63/oz, $1229.56/oz, $1232.22/oz, $1235.19/oz
Supports: $1221.69/oz, $1219.16/oz, $1216.02/oz, $1212.52/oz, $1210.36/oz, $1208.18/oz
Psychological: $1200/oz, $1250/oz
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
