Spot gold had risen 0.2 percent to $1,314.10 per ounce by 0651 GMT, having hit its weakest since Jan. 29 at $1,308.20 in the last session.
U.S. gold futures were firm at $1,318.10 an ounce.
· Liquidity was low in Asia’s gold markets, with much of the region on holiday for the Lunar New Year.
· “There is strong technical support and the Fed is mostly dovish, which should see gold supported around the $1,300-area,” said Jeffrey Halley, senior market analyst, OANDA, adding that a risk-on environment was taking a bit of sheen out of gold.
“The focus would be more on the U.S. earnings season due to the absence of China for the whole week.”
· Spot gold rose to its highest since late April at $1,326.30 last week, after the U.S. Federal Reserve kept interest rates steady and said it would be patient on further hikes amid a suddenly cloudy outlook for the U.S. economy due to global growth concerns and the U.S.-China trade dispute.
However, solid U.S. jobs data that came out on Friday allayed concerns of an immediate slowdown in the U.S. economy.
· The central bank may need to raise interest rates a bit further if the economy does well, Cleveland Fed President Loretta Mester said on Monday.
· “It seems to us that investors will need to get more signals before getting more aggressive in (acquiring long positions in gold), which won’t come until $1,360 or so,” analysts at TD Securities said in a research note.
“Despite the fact that the Fed has gone dovish, they could still hike one more time.”
· Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped 0.50 percent to 813.29 tonnes on Monday. Holdings have fallen for a second straight session.
· “On the downside, support around $1,300 should be strong in the short-term (for gold) and we favour buying dips towards that level,” MKS PAMP Group said in a trading note.
· Gold levels
Gold prices have declined today to 1308 and a dollar shy of the 38.2% Fibo retracement of the 23rd Jan incline to 1326 recent tops and the confluence of S3. The move was overdone and exceeded the ATR. We have seen a reversion back to 38.2% of the decline from the tops and of the same of today's sell-off. A close below the prior day's close of 1316 would be bearish and supporting the prospects of an interim top and potential reversal of the late Jan double bottoms down at 1276. A break of 1307 opens the 50% retracement at 1301 as a level to target guarding the 1297 9th Jan highs.
· Gold’s weekly outlook: Feb 04-08
Gold continued its bull run expanding towards the next resistance area rising $14 for the week. The week was another big one in terms of range where gold nearly managed a $30 bar from highs to lows. With$1300 now setting up as a big support along with supportive fundamentals aiding the prices it does seem a new high is on the cards in the current year.
On the chart –
Gold had another big week with the formation of higher highs and higher lows and a closing above the resistance level all auguring towards higher prices. The support of $1297 was tested and the price closed way higher indicating a new floor for the price. We have 2 scenarios –
1. Gold had a positive closing and till the support is held it can move towards $1327. Once this is crossed it can glide towards $1341. And if this is crossed it can climb till $1356.
2. Short trades remain extinguished as gold continues it’s bull run closing above the resistances. For trades to come live the support of $1297 must now be broken.
· GOLD TECHNICAL ANALYSIS
Gold prices are pulling back from chart inflection point resistance at 1323.60, as expected. From here, a push through a dense support region underpinned by a rising trend line now at 1289.50 initially opens the door for a test of the range bottom at 1276.50. Alternatively, a reversal higher that takes prices above 1323.60 sees the next upside hurdle in the trend-defining 1357.50-66.06 region.
· Among other precious metals, palladium was down 0.1 percent at $1,362.73 per ounce.
Silver rose 0.3 percent to $15.90, while platinum was steady at $816.77.
Reference: Reuters, Kitco
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