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Gold inches higher for second straight session, US data in focus

5/12/2017, 3:45:44 PMTrading Strategies
Gold inches higher for second straight session, US data in focus

Having snapped six consecutive days of losing streak on Thursday, Gold extended its recovery move from near 2-month lows touched earlier this week and has now jumped to multi-day tops near $1228 level.

A slight deterioration in investors' appetite for riskier assets - like equities, was seen boosting the precious metal's safe-haven investment appeal. This coupled with a weaker US Dollar, primarily on the back of weaker tone surrounding the US treasury bond yields, further benefitted dollar-denominated commodities and helped the yellow metal to build on overnight gains. 

The metal is now sustaining its move back above 100-day SMA and hence, a follow through recovery, led by short-covering, now seems a distinct possibility. 

Meanwhile, today's US macroeconomic data - CPI, monthly retail sales and Prelim UoM Consumer Sentiment, would influence June Fed rate-hike expectations and eventually determine the next leg of directional move for the non-yielding commodity. 

Technical levels to watch

A follow through buying interest has the potential to lift the metal further towards weekly high resistance near $1235-36 area, above which a fresh bout of short-covering should accelerate the up-move back towards the very important 200-day SMA hurdle near $1248-50 region.

On the flip side, retracement back below $1225-24 region (100-day SMA) might continue to find some immediate support near $1218-17 area, which if broken decisively would turn the metal vulnerable to aim towards testing its next important support near $1205-04 region.