Gold jumps above 100-DMA, USD sell-off not necessarily a good news

Gold is trading above 100-DMA level of $1249.50 after failing for the last two days to hold above the key MA despite the sharp sell-off in the USD.

The Dollar Index has dropped from 97.16 to 95.60 levels this week. However, gold struggled to close above 100-DMA. Moreover, the previous two daily candles carry a long upper shadow, suggesting the upticks are being met with fresh offers.

The USD sell-off isn’t necessarily good news, given the greenback’s weakness is due to a spike in the European currencies and Antipodeans on heightened odds of an early policy tightening, which is negative for the yellow metal.

The data docket is light, hence the focus remains on the bond yields. An uptick in the European yields could weigh over gold and vice versa.

Gold Technical Levels

The metal was last seen trading around $1253.19/Oz. A break above $1255.23 (50% Fib R of May low - June high + 50-DMA) would open up upside towards $1258.90 (June 23 high) and $1264.87 (38.2% Fib). On the downside, breach of support at $1248.80 (session low) would expose $1240.71 (June 21 low) and $1236 (June 26 low).