Gold Holding Above $1280, Upside Seems Capped
Gold
managed to recover from Wednesday's low near $1272 support on
disappointing US private sector employment report but faded its spike to
$1290. After sliding lower for three straight days, the precious metal
is now trading with marginal gains near $1280 level.
Earlier
during the week, the metal managed to move above $1300 handle but
couldn't sustain its strength at higher levels. The metal extended its
profit-taking move on Wednesday before witnessing a bump-up to $1290 to
eventually drop to day's low of $1272. The yellow metal, however,
recovered a bit from low levels to settle near $1280 level.
The
$1280 level represents 23.6% Fibonacci retracement level of $1207-$1303
up-move and Wednesday's recovery from lower levels was from 38.2%
Fibonacci retracement level. The metal has now moved within a short-term
descending trend-channel and ahead of Friday's monthly US jobs report,
it seems unlikely to break-out from this channel and provide a clear
direction trend for the near-term.
Technical levels to watch
On
the downside, $1272 confluence region, also coinciding with the
short-term descending trend-channel support, remains immediate support,
which if broken would confirm extension of the near-term corrective
move. Below $1272, the metal could immediately drop towards testing 50%
Fibonacci retracement level support near $1255 region.
On the
upside, the ascending trend-channel resistance near $1284, closely
followed by hourly 100-SMA near $1287 are immediate resistance levels to
clear. A sustained break-out through the ascending trend-channel
resistance now seems to clear the path for the metal to dart back
towards $1300 mark with $1295 level as intermediate resistance.