Gold trading weak amid renewed USD strength

Haresh Menghani FXStreet

Gold traded with mild negative bias on Tuesday and dropped to the lower end of a 4-day old trading range.

Currently trading around $1233 level, hawkish comments from Philadelphia Federal Reserve Bank President Patrick Harker, hinting towards possibility of a Fed rate-hike action in March, was seen weighing on the non-yielding precious metal.

Moreover, growing prospects of an eventual Fed rate-hike action triggered a fresh wave of up-move in the US Treasury bond yields and underpinned resurgent US Dollar strength, eventually denting demand for dollar-denominated commodities - like gold.

Furthermore, reviving investors' appetite for riskier assets drove flows away from perceived safe-haven assets and also collaborated to the yellow metal's offered tone ahead of a slew of speeches from various FOMC members on Tuesday and the minutes of the latest FOMC meeting on Wednesday.

Technical levels to watch

From current levels, $1230 level is likely to protect immediate downside below which the slide could get extended towards $1225 intermediate support ahead of 100-day SMA support near $1215 region.

On the upside, momentum above $1240 level might continue to confront resistance at multi-month highs near $1245 region, which if cleared decisively is likely to accelerate the up-move beyond $1250 hurdle towards testing the very important 200-day SMA resistance near $1260-62 region.

1. R3 1234.92
2. R2 1234.82
3. R1 1234.60
PP 1234.50
1. S1 1234.28
2. S2 1234.18
3. S3 1233.96

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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