Gold rejected at 100-DMA, drops to test 5-DMA

Gold brought an end to its two-day relief rally from multi-month troughs and now corrects slightly lower in response to the ongoing strength in the US treasury yields.

Gold: Upside favoured amid risk-off?

Currently, gold now trades modestly flat at 1215.80, flirting with session lows struck at 1215.52 last minutes. The bullion stalled its rebound and now came under mild bearish pressure as disappointing Chinese manufacturing PMI readings raised concerns over the health of the world’s top yellow metal consumer and hence, weighed on the Chinese demand prospects for gold. Moreover, strengthening shorter as well as longer duration treasury yields also weigh on the non-interest paying safe-haven. Meanwhile, the US dollar index trades +0.08% higher at 95.91, fresh session highs.

On the data front, we have a set of manufacturing sector activity reports release from the US, while the ADP jobs report due tomorrow will be closely watched for further cues on the dollar-denominated precious metal.

Gold Technical Levels                                   

The metal has an immediate resistance at 1220 (100-DMA) and 1225 (round number). Meanwhile, the support stands at 1210.40 (1h 50-SMA) below which doors could open for 1200 (key support).