Gold inched higher on Monday, increasing the price of the yellow metal to more than $1270.00 an ounce following some key economic releases. The technical bias remains bullish because of a higher high in the recent upside move.
XAU/USD Technical Analysis
As of this writing, the precious metal is being traded near $1275 an ounce. A hurdle can be noted near $1300, a key psychological level ahead of $1357, the high of the last major upside rally on the daily chart and then $1400, the psychological level. A break and daily closing above the $1400 level shall trigger renewed buying interest, validating a rally towards the $1440 resistance zone.
On the downside, a support may be noted around $1270, an immediate horizontal support ahead of $1250, the psychological level as well as another key horizontal support area and then $1200, a major psychological number. The technical bias shall remain bullish as long as the $1200 support area is intact.
US Budget Statement
The U.S. posted its largest budget deficit since 2013 in the fiscal year that just ended, as a pickup in spending exceeded revenue gains. The federal government’s gap grew to $665.7 billion in the 12 months through Sept. 30, compared with a $585.6 billion shortfall in fiscal 2016, the Treasury Department said Friday in a report released in Washington. That was in line with the Congressional Budget Office’s estimate of $668 billion.
Considering the overall technical and fundamental outlook, buying the precious metal around current levels appears to be a good strategy in short to medium term.