Gold inched lower on Monday, decreasing the price of yellow metal to less than $1260.00 an ounce ahead of the Federal Reserve’s chief Janet Yellen speech. The technical bias remains bullish because of a higher low in the recent downside move.
As of this writing, the yellow metal is being traded near $1254 an ounce. A support may be seen near $1251, the short-term horizontal support area ahead of $1239, the low of March 31st 2017 and then $1200, the psychological number. A break and hourly closing below the $1200 support shall push the precious metal into bearish territory, validating a move towards the $1160 support zone.
On the upside, the precious metal is likely to face a hurdle near $1258, the trendline resistance area as demonstrated with red color in the given above chart. A break and hourly closing above the $1258 resistance shall trigger more buying interest, putting $1300 in sight. The technical bias shall remain bullish as long as the 1200 support zone is intact.
How Gold Reacted on Yellen’s Speeches in Past?
Gold rallied by $10 an ounce after the most recent speech by Yellen as she hinted at sustained monetary policy for at least three months.
However, the precious metal fell by $12 after an earlier Yellen’s speech when she said the central bank is mulling over more aggressive monetary policy moves in the coming months.
What Assets to Trade after Yellen’s Speech
Gold reacts sharply after the Yellen’s speech as the precious metal moves opposite to the US Dollar. In addition to gold, some major pairs such as EUR/USD, GBP/USD, AUD/USD and USDCAD can also be good assets to trade after the Yellen’s speech.
Considering the overall technical and fundamental outlook, selling the precious metal around current levels appears to be a good strategy in short to medium term.