Gold extends bullish trajectory further beyond $1200 mark

Gold extended its near-term upward trajectory further beyond $1200 psychological mark and now seems to have confirmed a near-term breakout above 50-day SMA.

Currently trading around $1205, the highest level since Nov. 23, the precious metal traded in positive territory for seventh session in the previous eight amid broad based US Dollar sell-off in wake of disappointment from President-elect Donald Trump press conference that failed to provide any details on his economic plans to spur growth. A weaker dollar tends to boost demand for dollar-denominated commodities, including gold. 

From technical perspective, the metal is now trading at its immediate resistance marked by 38.2% Fibonacci retracement level of $1337-$1123 post-US election sharp slide. However, a sustained move above 50-day SMA, for the first time since early November, reinforces the metal's near-term bullish momentum and seems to point towards an eventual break through this immediate hurdle. 

However, investors are likely to wait for some fresh insight over the Fed's near-term monetary policy outlook and hence, would closely scrutinize comments from various Fed officials, including the Fed Chair Janet Yellen, which would provide fresh impetus for the non-yielding yellow metal.

Technical levels to watch

A follow through buying interest has the potential to continue boosting the commodity towards $1215 level (Nov. 23 high) above which the metal seems all set to head towards 50% Fibonacci retracement level resistance near $1230 area. On the downside, retracement below $1200 handle might now find support near $1196-95 region. Weakness below $1195 support might now be bought into and hence, is likely to be limited near 50-day SMA near $1190 region. Only a decisive break back below 50-day SMA might now negate prospects of any further up-move for the commodity.