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Gold inched lower on Wednesday, decreasing the price of yellow metal to less than $1320.00 an ounce after some key economic releases. The technical bias remains bearish because of a lower low in the recent downside move.
XAU/USD Technical Analysis
As of this writing, the precious metal is being traded near $1314.46 an ounce. A hurdle can be noted near $1350, a key psychological level ahead of $1357, the high of the last major upside rally on the daily chart and then $1400, the psychological level. A break and daily closing above the $1400 level shall trigger renewed buying interest, validating a rally towards the $1440 resistance zone.
On the downside, a support may be noted around $1311, an immediate horizontal support ahead of $1300, the psychological level as well as another key horizontal support area and then $1250, a major psychological number. The technical bias shall remain bullish as long as the $1200 support area is intact.
US Manufacturing PMI
Business activity in the U.S. private sector was higher than expected in December, rising optimism over the American economy, according to data released on Tuesday.
In a report, market research group IHS Markit said that its manufacturing purchasing managers’ index (PMI), rose to to 55.1 in December, from the prior reading of 55.0. It was the highest reading since March 2015.
On the indices, a reading above 50.0 indicates expansion, below indicates contraction.
Economists had estimated that it would remain flat at 55.0.
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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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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