Risk-on Sentiment Keeps Gold Bearish – What’s Next?
Gold continues to trade lower on Wednesday to hang around a four-month low of $1,266, touched in the previous session. One of the significant reasons behind gold’s bearish trend is the stronger US dollar. Robust US housing data dispelled worries about an economic slowdown in the nation, amid upbeat risk appetite.
On the other hand, around 95% of the US companies reported positive earnings report. Names like Twitter, Texas Instruments, Coca Cola and Hasbro are at the top of the list. Ultimately, there’s a Risk-on sentiment in the market and investors are moving their funds into the stock markets and other risky assets, causing a drop in gold’s demand.
Gold technical hasn’t changed so far. Therefore I would suggest following the same technical levels we discussed on Tuesday. GOLD faced support around 1,265 and managed to stay above this level.
Support Resistance
1266.84 1275.99
1262.04 1280.34
1252.89 1289.49
Key Trading Level: 1271.19
I would consider staying bullish above 1,265 with a take profit of around 1,275 and 1,278. While selling should be preferred below 1,280.
Good luck and trade with care!
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