Gold has now turned lower, extending its weakness for fourth consecutive session, sliding further below $1280 level to currently trade near $1278, though off day's low of $1274.50.
Extending its reversal from $1300 handle, gold prices on Wednesday fell to as low as $1272 before recovering a bit, on mixed US economic data, to $1279. On Thursday, too, gold saw some initial buying interest that lifted the metal to $1283 but resumed its corrective move and dropped to an intraday low near $1274.
From technical perspective, $1280-82 area represents a key confluence resistance area comprising of 23.6% Fibonacci retracement level of $1207-$1303 up-swing and a short-term descending trend-channel resistance formation on hourly chart. Hence, clearing this immediate strong resistance would be key for enabling the metal to resume its prior appreciating move.
Technical levels to watch
On the downside, Wednesday's low level near $1272, closely followed by $1266-65 confluence region, are immediate support levels. The $1266-65 support constitutes 38.2% Fibonacci retracement level and the ascending trend-channel support. Hence, a decisive break below this strong support seems to accelerate the fall immediately towards 50% Fibonacci retracement level support near $1255 region.
On the upside, $1280-82 area remains immediate resistance to watch for. On decisive break-through this strong resistance, the metal seems to make a fresh attempt to move back towards $1300 psychological mark resistance.