Gold Attempting a Recovery to 100-DMA Ahead of US Data
After dipping below $1200 level on Monday, Gold is attempting a recovery back towards 100-day SMA as traders seem to reduce their bearish bets ahead of the US economic releases.
On Monday, the precious metal extended its slide witnessed on Friday led by comments from the Federal Reserve Chairwoman Janet Yellen, indicating an interest-rate hike in June/July, and dropped to its lowest level since mid-Feb.
Rising expectations of another Fed rate-hike has been the key factor assisting a broad based USD strength and has kept the yellow metal on the back foot since the beginning of this month when the metal surged to $1300 mark.
On Tuesday, the bullion seems to be gaining some traction amid risk-off sentiment as depicted by a minor retracement in the USD/JPY pair and European equities. Traders would take further cues on the near-term direction of the precious metal from today's US economic releases, later during the NA session.
From technical perspective, the metal last week's break, and a subsequent weakness on Monday, below 100-day SMA seems to suggest additional weakness for the precious metal in the near-term.
Technical levels to watch
On the immediate upside, 100-day SMA near $1217.50 remains immediate hurdle to clear, beyond which the metal could extend the recovery towards $1225 horizontal resistance. Momentum above $1225 seems to further assist the yellow metal towards testing 50-day SMA resistance near $1245 in the near-term.
On the flip side, weakness back below $1200 handle seems to drag the metal immediately towards $1190 (Feb. 16 lows) and the fall could further get extended in the near-term towards testing the very important 200-day SMA support, currently near $1265-60 region.
