The price of gold extended upside movement on Monday, increasing the value of yellow metal to more than 123.70 amid some key economic releases. The technical bias remains bullish because of a Higher High in the recent upside rally. The precious metal is on verge of critical breakout through the daily triangle formation.
As of this writing, the precious metal is being traded near $1230 an ounce. A support may be seen near $1215, the channel support ahead of $1190-1200, the confluence of psychological number as well as swing low of the last major downside move as demonstrated in our daily chart. A break and daily closing below the $1190 support area could incite renewed selling pressure towards the $1100 handle.
On the upside, the metal is likely to face a hurdle near $1238 an ounce, the channel resistance ahead of $1250, the psychological number and then $1263, the swing high of the last major upside rally. The technical bias will remain bullish as long as the $1190 support area is intact.
USD GDP News
U.S. economic growth slowed in the fourth quarter, but not as sharply as initially thought, with businesses less aggressive in their efforts to reduce unwanted inventory, which could hurt output in the first three months of 2016. Gross domestic product increased at a 1.0 percent annual rate instead of the previously reported 0.7 percent pace, the Commerce Department said on Friday in its second GDP estimate. Economists polled by Reuters had expected that fourth-quarter GDP growth would be revised down to a 0.4 percent pace. The economy grew at a rate of 2.0 percent in the third quarter.
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.