On Thursday the precious metal gold edged up recovering from near 4-month lows of 1,270. The bullish movement triggered after the economic data on eurozone businesses were under pressure reignited concerns about global growth, but a stronger dollar capped its gains.
Let us recall, the gold remained under massive selling pressure due to optimistic economic data from China. The optimistic Chinese data indicates the concerns over a slowdown in global economic growth have been alleviated. As a result, it tilts risk appetite, in turn pressuring gold.
China’s economy grew in the first quarter at a constant rate of 6.4%, topping the forecast for a 6.3% growth. On the technical side, gold has violated the descending triangle pattern at 1,284 and has closed a couple of 4-hour candles below this support level which now is working as a resistance. The 20, 25 and 50 periods EMA likely push gold prices lower.
Gold can find support around 1,271 and 1,265. While as per descending triangle breakout, the precious metal can also lead towards $1,250 this week.
Right now, the positive US retail sales are likely to place a bearish pressure on gold. The figures jumped by the most since September 2017 as gains in motor vehicles and gasoline stations boosted sales, signaling consumers are giving the economy greater support. So, the idea is to stay bearish below 1,276 with a take profit of around 1,270 and 1,265. Good luck and trade with care!