Gold clocks 10-day highs near $1263

9 July, 2018

Technical correction extends above $ 1260 amid broad-based USD weakness. Lingering US-Sino trade tensions support, as the focus shifts to the US CPI due later this week.

Gold (futures on NYMEX) is seen fading the upmove to $ 1263.10 – fresh ten day tops, although remains above the $ 1260 mark amid persisting broad-based US dollar selling.

The greenback extended its bearish momentum and hit fresh three-and-a-half week lows against its major peers, in the wake of dismal US jobs data that showed slower-than-expected wage growth. A weaker greenback makes the USD-denominated gold cheaper for its buyers in foreign currency and vice-versa.

The latest leg down in the metal can be partly attributed to the risk-on sentiment prevalent across the financial markets, which usually tends to dampen the sentiment around the safe-haven gold.

However, gold prices will continue to derive some support from the ongoing US-China trade tensions and UK political uncertainty, especially after three Brexit Ministers resigned earlier today amid a split on the UK PM May’s new Brexit plan.

Looking ahead, the US inflation report will have a major impact on the bullion this week. In the meantime, the USD dynamics and risk trends will continue to drive the gold trades.

Gold Technical Levels

  • Omkar Godbole, FXStreet’ Analyst offer key technical levels for trading gold in the day ahead.
  • Resistances: $1,261 (July 4 high), $1,274 (23.6% of recent sell-off), $1,282 (May 21 low).
  • Supports: $1,254 (session low), $1,244 (June 28 low), $1,237 (July 3 low).

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