Gold snaps seven days of winning streak, US CPI and Yellen speech in focus
Gold snapped seven consecutive days of winning streak and corrected from nearly eight-week high hit in the previous session.
Currently trading around $1212 level, a broad based greenback recovery interrupted bullion's well-established recovery trend from 10-1/2 month lows touched in December. Apart from the US Dollar strength, a fresh wave of risk-on trade is further denting the yellow metal's safe-haven appeal and is also collaborating to a minor corrective move witnessed on Wednesday.
On Tuesday, the precious metal rose to the highest level since Nov. 22 and the up-move was supported by a sharp fall in the key US Dollar Index triggered by US president-elect Donald Trump's remarks that a stronger dollar is hurting the economy, which added to the uncertainty around his economic plans aimed at spurring economic growth.
Moreover, traders also seem to have turned cautious and preferred to lock-in some profits ahead of the US CPI print later during NA session. A higher-than-expected print would add to December's strong wage growth and revive Fed rate-hike speculations, eventually weigh on the non-yielding yellow metal.
Later during NY session, speech from the Fed Chair Janet Yellen would be looked upon for some fresh clues over the central bank's near-term monetary policy outlook and might also provide fresh impetus for the metal's next leg of directional move.
Technical levels to watch
Immediate support is pegged near $1208 level below which the commodity is likely to drop towards $1202-1200 strong support. A follow through selling pressure below $1200 psychological mark seems to extend the corrective slide further towards $1190 intermediate support, en-route 50-day SMA support near $1182-80 region.
On the flip side, momentum above multi-week highs resistance near $1218 level now seems to pave way for continuation of the metal’s near-term upward trajectory further towards $1230 resistance, with $1221-22 area providing some intermediate hurdle.