FXStreet (Mumbai) – Gold prices on Comex kicked-off the week on a stronger footing, staging a solid comeback from fresh five year lows reached on Friday after renewed Greek optimism and softer Chinese PMI reading aggravated the downside in the yellow metal.
Gold extends the recovery towards $ 1100
Currently, gold trades nearly 1% higher at 1096.10, extending its recovery from 1073.70 – fresh five year lows printed on Friday. Gold bounced-back sharply in Asia, as traders took to profit-booking after the recent slump ahead of the key event – FOMC decision due on Wednesday.
Meanwhile, the US dollar index, a virtual gauge of greenback’s strength, trades flat at 97.30. A stronger greenback makes dollar-priced in gold more expensive to holders on other currencies and vice-versa.
Gold prices plunged to the levels last seen in 2010 as the strength of the US currency persists on expectations that the time of the first increase in the Federal Reserve’s federal funds rates has come closer.
Moreover, physical demand, including from China and India, has remained subdued even though prices saw a steep decline. China’s gold reserves rose to 1,658 tonnes as of the end of June, from 1,054 tonnes in April 2009, according to the People’s Bank of China (PBoC).
In the week ahead, the yellow metal will be highly influenced by major US macro releases pair with the US FOMC statement which may provide fresh cues on the USD moves.
Gold Technical Levels
The metal has an immediate resistance at 1100 and 1105 levels. Meanwhile, support stands at 1090 below which doors could open for 1085 levels.
(Market News Provided by FXstreet)