Gold advances to 3-week highs

Gold advanced to fresh 3-week high on Wednesday, as fading hopes of a Fed rate hike continued to weigh on the dollar.

The yellow metal reached its highest since mid May at $1,264.32 an ounce, to finally settle above the $1,260.00 mark.

Gold has recovered up to the 61.8% retracement of its May's decline, moving inversely with expectations of a Fed June rate hike. The implied probability of a June rate hike is now at 2% from 24% last week while July hike odds are down to 25% from 50% before the May nonfarm payrolls.

Gold technical view

“Consolidating right below the Fibonacci level, the daily chart shows that the commodity is now well above a bullish 100 SMA, whilst the technical indicators have turned higher and crossed their mid-lines into positive territory, supporting some additional gains on an extension beyond the mentioned high,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the RSI indicator has lost upward strength, but holds within extreme overbought territory at 78, while the Momentum indicator has turned flat well above its 100 level, and the price develops above all of its moving average, supporting the longer term outlook.”  

Support levels:  1,251.60 1,242.20 1,234.20. Resistance levels: 1,264.40 1,272.50 1,283.20.