Gold gained additional traction on Monday and rose back to the highest level since November amid fading expectations for near-term Fed rate-hike action.
Currently trading near $1122 region, off session peak level of $1225, Friday’s mixed US jobs report, especially dismal average earnings growth, continues to weigh on the US Dollar and is supportive of the bid tone surrounding the yellow metal for the third consecutive session.
Adding to this, lower-than-expected release of Caixin Services PMI from China prompted some safe-haven buying and provided an additional boost to the precious metal.
Looking at the broader picture, last week’s rebound from sub-$1200 mark and subsequent retest of 100-day SMA strong resistance seems to suggest the underlying strength in the metal’s ongoing up-move. Hence, the metal seems more likely to build on to its near-term upward trajectory, albeit needs a convincingly break through 100-day SMA hurdle to confirm the break-out.
Technical levels to watch
A clear break above $1225 barrier (100-day SMA), the metal is likely to accelerate the up-move towards $1233 level (Nov. 16 high) before heading towards $1250 horizontal resistance. On the flip side, weakness below $1220 level now seems to find support near $1210 area below which the commodity is likely to turn vulnerable to head back towards retesting sub-$1200 support near $1186-85 region, with $1200 psychological mark providing some intermediate support.
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