Gold retreates in Asia on strong US dollar

Gold prices reatreated in Asia as the American dollar strengthened, while the Asian equity indices traded mixed.

Drops to weekly pivot level

Prices are currently trading around $1262, which is the weekly classic R1 level. Prices breached R1 on Tuesday but the subsequent move higher failed to pierce the R2 for two consecutive sessions, thus paving way for a correction in the Asian session today.

The retreat in Asia has been aided by a 0.20% rise in the US dollar index. Meanwhile, the mixed action in the major Asian equity indices is providing little/no cues to the yellow metal.

Gold Technical Levels

Breach of $1262 (weekly classic R1) would open doors for $1259.56 (Oct 14 low), under which a major support is seen at $1253 (23.6% of 2011 high – 2015 low). On the higher side, 200-DMA level of $1268 could act as resistance, which if breached would shift risk in favor of an extension of the rebound from $1241.50 (Oct 7 low) to $1288.80 (May 16 high) and $1300 (zero figure).