Gold backed right off resistance, ending week lower on immense U.S. dollar pressure and renewed expectations for a U.S. rate hike. It has been a dreadful week for gold as prices hit a seven-week high (1,224) initially, before turning volatile and succumbed to heavy profit-taking. Staging a comeback on Friday, the yellow metal is still down around 0.3 percent for the week. So far, gold remains in ascending channel and given that prices is unable to break above 1,225 with any conviction, a fall back below looks imminent.
Gold pops higher on Friday as the U.S. dollar failed to encourage bears to attempt further assaults. Surging past the 38.20% Fibonacci retracement, the yellow metal held the first support line at 1,194 before short covering entered in mid day trading session. Putting up a strong front despite any gold-positive news, the precious complex is likely to hold the 1,200 support level with a possible upward bias to the 1,225 level.
Gold was struggling in early session as price action was generally subdued and looks to trade range bound between 1,192 – 1,200. However as the day progresses,the precious metal gained momentum after a break of the technical resistance at 1,200 had buy orders automatically triggered. Prices rallied as high as 1,210 in the aftermath. Somewhat puzzling, the fairly upbeat surged had come under the phase of an explosive dollar rally. Perhaps this might pass off that the yellow metal may be forming a base.