Gold prices on Comex extends its bullish momentum from Asia and climbs more than 1.5% in the European session, after the US dollar extends its broad based sell-off following FOMC’s dovish statement which stated that the rate hike timing will be dependent on the strength of the upcoming US macro data.
Gold breaks above 50-DMA, eyes $ 1200
Currently, gold trades 1.61% higher at 1195.70, having posted fresh two week highs at 1197.50 in last hours. Gold extends its upward moves and aims higher towards 1200 marker largely on the back of US dollar weakness across the board, boosting the demand for the yellow metal. A weaker US dollar makes dollar priced-in commodities cheaper for holders in foreign currencies.
The US dollar index, measuring the relative strength of the greenback against a basket of six major currencies, trades -0.46% lower at 94.03, hovering close to fresh four week lows printed at 93.82.
Moreover, the latest dovish FOMC statement with the Fed keeping the interest rate unchanged at a historical minimum in June, despite a limited number of market participants betting on an early move, also supported the demand for the yellow metal as an alternative higher yielding asset.
Financial markets are now waiting for a host of major US economic releases due later today for further USD moves, while impending Greece debt talks at the Euro group meeting due later may also keep the safe-haven bids for gold underpinned.
Gold Technical Levels
The metal has an immediate resistance at 1200 and 1204.70 (June 1 High) levels. Meanwhile, support stands at 1180 below which doors could open for 1175.40 (June 16 Low) levels.