FXStreet (Mumbai) – The yellow metal opened the FOMC week on a firmer footing, and advanced through $ 1100 barrier, despite the ongoing relief rally in stocks and oil.
Gold benefits from weaker USD
Currently, gold trades 0.48% higher at fresh session highs of 1102, having found good support near 1097 region. Gold edged higher this session amidst positive equities and oil price recovery, although markets remain concerned whether the recovery will sustain. At the moment, Nikkei rallies +1.40% and China stock markets are up nearly 1%.
Moreover, a pick-up in investors’ confidence in the yellow metal as evidence by rising demand, also added to the upbeat sentiment around the bullion. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose to 664.17 tonnes on Friday from 662.09 tonnes on Thursday.
As Bloomberg reports, “Hedge funds more than doubled their net-long position in bullion last week, just three weeks after they were the most-bearish ever. Investor holdings of gold through exchange-traded products are expanding at the fastest pace in a year, and the value of the ETPs has jumped by $3 billion in 2016.”
Looking ahead, it’s a big week for gold as the global central banks’ events are lined up, with the much-awaited Fed decision closely eyed for further cues on the Fed’s interest rates outlook.
Gold Technical Levels
The metal has an immediate resistance at 1109.80 (Jan 20 High) and 1111.10 (Jan 8 High). Meanwhile, the support stands at 1095.75 (1h-100-SMA) below which doors could open for 1091.35 (1h 200-SMA/ 20-DMA).
(Market News Provided by FXstreet)