Fears of US recession, sluggish data and Brexit uncertainty please safe-haven buyers. $1320 acts as immediate resistance with $1308 likely being nearby support.
Gold prices are on bid around $1316 during early Monday. The yellow metal recently benefited as global markets turned risk-off moves after sluggish data from the US flashed a sign of recession for the world’s largest economy. Adding to the buying bets was the CFTC report showing an increase in net bullish positions.
Friday’s sluggish print of the US Markit purchasing manager index (PMI) dragged the 10-year treasury yields beneath 3-month bill for the first time since 2007. Pessimists considered it as another signal favoring that the US economy will again slide into recession.
The weekly report of the non-commercial futures contracts of Gold traded by large speculators and hedge funds, published by the Commodity Futures Trading Commission (CFTC), showed a net increase in buying for the first time in three weeks by 9,577 net contracts to 88,396 contracts.
Traders may now look forward to speeches by the Fed policymakers, namely the Presidents of the Federal Reserve Bank of Chicago and Philadelphia respectively, in order to confirm further bearish bias of the US central bank.
Gold Technical Analysis
Immediate descending trend-line and early month high surrounding $1320 can act as an immediate resistance ahead of fuelling prices towards $1332.
Meanwhile, an upward sloping support-line joining lows since March 07 at $1308 may restrict nearby declines, a break of which can reprint $1302 and $1298 on the chart.
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