Gold prices backed off from daily highs as upbeat US data released over the last week increased prospects of Fed rate hike.
PBOC rate cut lost its charm?
China’s central bank announced a 50bps cut in the reserve requirement ratio, but the market reaction was dull. Moreover, the news failed to trigger a risk-on the markets. Gold managed to hit news daily highs, but ran out of steam on prospects of Fed rate hike.
Data released in the US over the last week – durable goods, personal spending, Q4 GDP – put market fears regarding recession to rest. That seems to have brought back fears of a Fed rate hike, courtesy of which the metal eased from the daily high of $1235.43 to trade around $1127.
Gold Technical Levels
The immediate resistance is seen at 1240 (Friday’s high), above which the gains could be extended to 1253.32 (Feb 24 high). On the other hand, a breakdown of 1212 (23.6% of Dec low-Feb high) could see the prices drift lower to 1200 levels.
(Market News Provided by FXstreet)