Gold climbed unto a high of $ 1759 levels on last Monday and fell back . It extended it fall below $ 1700 levels and marked as low as $ 1687 on Friday and settled below $ 1700 at $ 1697. Rising treasury yields seems to be the direct relation to fall in gold prices. Friday positive numbers in Non farm payroll and Senates passing of stimulus could pressures gold price action.
This week, Monthly CPI and Core CPI data will be released off U.S on Wednesday. Other than this there is no major fundamental data release for this week. Apart from U.S , Industrial output from Germany shows drop in numbers which is offering volatility in FX market . Euro is ticking lower and GBP is seen to mark gains, U.S dollar index is been on a gaining for past three weeks and it could take a breather before it posts further gain. Fx market volatility could indirectly offer some support for gold price and it is currently trading near to its low of $ 1697 as we write the report.
Technically, for past three weeks gold is closing lower and making new lows. Gold is currently trading at $ 1697 while writing this report and Immediate support for gold is seen at $ 1689. Weekly and daily chart indicates gold could attempt a relief rally to compensate the past three weeks of fall. Weekly Fibonacci retracement $ 1689 could act as a support for gold which is 61.80% ( $1454 – $2072) retracement support. Resistance is seen at $ 1727 and $ 1761. Meanwhile a break of support will extend its fall to $ 1672.
Data and Events for U.S this week
- CPI & Core CPI Month on Month Wednesday 10th March.
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* Chart Source Netdania