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Gold inched lower on Friday, decreasing the price of the yellow metal to less than $1290.00 an ounce following some key economic releases. The technical bias remains bearish because of a lower low in the ongoing downside move.
XAU/USD Technical Analysis
As of this writing, the precious metal is being traded near $1287 an ounce. On the downside, a support may be noted around $1205, an immediate horizontal support ahead of $1200, a key horizontal support as well as psychological number and then $1180, another major horizontal support area.
On the upside, a hurdle can be noted near $1295, the high of the last major upside rally ahead of $1300, the psychological level as demonstrated with red color in the given below chart. A break and daily closing above the red mark shall trigger renewed buying interest, validating a rally towards the $1340 resistance zone. The technical bias shall remain bearish as long as the $1200 support area is intact.
US Home Resales
U.S. home resales unexpectedly fell in July to an 11-month low as a chronic shortage of properties boosted prices, the latest sign that the housing market recovery was slowing. The National Association of Realtors said existing home sales fell 1.3 percent to a seasonally adjusted annual rate of 5.44 million units last month. That was the lowest level since August 2016. Sales rose 2.1 percent on a year-on-year basis.
Economists had forecast sales gaining 0.9 percent to a rate of 5.57 million units last month. The NAR report followed data on Wednesday showing a 9.4 percent drop in sales of new single-family homes in July and the second weekly fall in applications for home purchase loans.
Trade Idea
Considering the overall technical and fundamental outlook, selling the precious metal around current levels appears to be a good strategy in short to medium term.
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