Gold capped by 50-DMA in Asia, awaits fresh impetus

Gold failed to sustain gains and turned into the negative territory over the last hour, as the risk environment improved further amid extended rebound seen in the Asian equities.

Gold heads towards $ 1240 mark

Currently, gold now trades -0.12% lower at 1243.36, having posted day’s highs at 1246.59 and day’s low at 1242.98. The bullion is seen consolidating the recent upside and now awaits fresh impetus for the next leg higher amid dwindling summer Fed rate hike bets, particularly after poor NFP data and yesterday’s comments from Fed Chair Yellen. In her scheduled speech a day before, Yellen avoided commenting about possible action at the next couple of meetings; unlike on May 27 when she thought a rate hike might be ‘appropriate in coming months’.

In response to Yellen’s remarks, the US dollar tumble to fresh multi-week troughs against its major peers, which sent gold prices back towards 50-DMA barrier located above $ 1246. Looking ahead, in absence of relevant economic news from the US docket until Friday’s consumer sentiment release, the gold traders will continue to follow USD moves along with the price-action in USD/JPY for fresh momentum.

Gold Technical Levels                                   

The metal has an immediate resistance at 1246.89 (50-DMA) and 1250 (round number). Meanwhile, the support stands at 1230.73 (5-DMA) below which doors could open for 1226 (100-DMA).