Gold Sees Some Profit Taking As Risk Appetite Upticks
- Gold saw some profit-taking pressure set in Tuesday, following recent gains. An improved risk appetite on this day also worked against the safe-haven metal. Still, some profit taking and chart consolidation is not unhealthy for a market like gold, which is in a firm near-term price uptrend. April Comex gold was last down $3.10 at $1,231.10 an ounce. May Comex silver was last down $0.143 at $14.775 an ounce.
Technically, April gold futures prices closed nearer the session low. Prices are still in a 2.5-month-old uptrend on the daily bar chart and bulls have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,263.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,200.00. First resistance is seen at $1,240.00 and then at $1,250.00. First support is seen at $1,225.00 and then at this week’s low of $1,216.30. Wyckoff’s Market Rating: 7.0
- Gold futures on the COMEX division of the New York Mercantile Exchange fell on Tuesday as U.S. equities rebounded sharply and the U.S. dollar also rose.
The most active gold contract for April delivery fell 3.6 U.S. dollars, or 0.29 percent, to settle at 1,230.80 dollars per ounce.
The precious metal came under pressure as the U.S. Dow Jones Industrial Average rose by 325 points, or 1.97 percent as of 17:40 GMT. Analysts noted that when equities post losses, the precious metal usually goes up, as investors are seeking safe haven assets.
The U.S. Dollar Index, a measure of the dollar against a basket of major currencies, rose by 0.26 percent to 98.41 as of 17:40 GMT. Gold and the dollar typically move in opposite directions.
A report released by the Institute for Supply Management (ISM) also put pressure on the precious metal. The ISM manufacturing index posted a gain of 1.3 to a 49.5 level, which was better than expected. Analysts believed the report may contribute to a more optimistic outlook on the U.S. economy, dampening the safe haven demand for gold.
Traders will be watching for more economic data due out later this week. The ADP employment report will be released on Wednesday, weekly jobless claims on Thursday, and international trade and the big jobs report on Friday.
Reference: Kitco, Xinhua
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