Gold price close below key support; focus on FED speakers this week

London (June 20)  Gold prices dipped to five week lows as the dollar continued to strength against a basket of currencies since the Federal Reserve met last week.

The market failed to draw support from issues surrounding Brexit and geopolitical tensions in the Middle East amongst others which should have usually set the traders into risk averse mode; the focus now has clearly shifted to a line-up of speakers from the Federal Reserve this week who are expected to reaffirm that the central bank would continue to maintain its hawkish stand over interest rates and overlook the transitory weakness in economic data.

On the economic releases front, a marked improvement in economic data from the US this week could bring prices under further pressure.

Gold broke below key support at $1,250/oz (Rs.28,550/ten gms) and continues to trade below this level at the time of writing this.

We maintain a negative stance on Gold and expect prices to decline to subsequent support levels at $1,235/oz (Rs.28,250/ten grams) and $1,225/oz (Rs.28,100). On the upside, a daily close above resistance at Rs.1250/oz could see a brief short covering rally in Gold with prices moving higher to $1260/oz (Rs.28,700/ten grams).

Source: CommodityOnline