Gold inched lower on Monday, decreasing the price of yellow metal to less than $1300.00 an ounce following a sharp surge in price on Friday. The technical bias remains bullish because of a higher high in the recent upside move.
XAU/USD Technical Analysis
As of this writing, the precious metal is being traded near $1290 an ounce. A hurdle can be noted near $1300, 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 $1270, an immediate horizontal support ahead of $1250, the psychological level as well as another key horizontal support area and then $1200, a major psychological number. The technical bias shall remain bullish as long as the $1200 support area is intact.
US Housing Data
U.S. home building jumped to a one-year high in October as disruptions caused by recent hurricanes in the South faded and communities in the region started replacing houses damaged by flooding. Housing starts surged 13.7 percent to a seasonally adjusted annual rate of 1.29 million units. That was the highest level since October 2016 and also the second-best reading in 10 years. September’s sales pace was revised up to 1.135 million units from the previously reported 1.127 million units. Economists polled by Reuters had forecast housing starts rising to a pace of 1.185 million units last month.
Trade Idea
Considering the overall technical and fundamental outlook, buying the precious metal around current levels appears to be a good strategy in short to medium term.
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