Gold inched higher on Wednesday, increasing the price of yellow metal to more than $1260.00 an ounce after some key economic releases. The technical bias remains bearish because of a lower low in the recent downside move.
XAU/USD Technical Analysis
As of this writing, the precious metal is being traded near $1264.46 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 $1239, an immediate horizontal support ahead of $1225, 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 Building Permits
U.S. single-family homebuilding and permits surged to more than 10-year highs in November, in a hopeful sign for a housing market that has been hobbled by supply constraints.
The Commerce Department said on Tuesday that single-family homebuilding, which accounts for the largest share of the housing market, jumped 5.3 percent to a rate of 930,000 units. That was the highest level since September 2007.
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.