Gold inched lower on Wednesday, decreasing the price of the yellow metal to less than $1270.00 an ounce following some key economic releases. The technical bias remains bearish because of a lower low in the ongoing downside move.
XAU/USD Technical Analysis
As of this writing, the precious metal is being traded near $1269 an ounce. On the downside, a support may be noted around $1205, an immediate horizontal support ahead of $1200, a key horizontal support as well as psychological number and then $1180, another major horizontal support area.
On the upside, a hurdle can be noted near $1295, the high of the last major upside rally ahead of $1300, the psychological level as demonstrated with red color in the given below chart. A break and daily closing above the red mark shall trigger renewed buying interest, validating a rally towards the $1340 resistance zone. The technical bias shall remain bearish as long as the $1200 support area is intact.
US Retail Sales
U.S. retail sales recorded their biggest increase in seven months in July as consumers boosted purchases of motor vehicles and raised discretionary spending, suggesting the economy continued to gain momentum early in the third quarter. Retail sales for June and May also were revised higher, which should help to assuage concerns about consumer spending after a slowdown at the start of the year. Tuesday’s upbeat report from the Commerce Department likely keeps the Federal Reserve on course to raise interest rates again in December.
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.