Technical Bias: Bullish
- Gold extends winning streak
- US Factory Orders missed expectations
- Gold Eyes $1255 in short term
Gold extended upside movement on Wednesday, increasing the price of yellow metal to more than $1215, for the fourth day in a row following the release of downbeat US economic reports yesterday. The technical bias remains bullish due to a Higher High and Higher Low on the daily chart.
As of this writing, the precious metal is being traded near $1217 an ounce. A hurdle can be seen near $1217, the 100-Day Simple Moving Average (SMA) ahead of $1226, the 76.4% fib level and then $1255, the confluence of 200-Day SMA as well as swing high of the last major upside rally.
On the downside, the yellow metal is likely to find a support around $1207, the 61.8% fib level ahead of $1193, the 50% fib level and then $1163, the trendline support area as demonstrated in the above daily chart. The technical bias will remain bullish as long as the $1167 support area is intact.
US Factory Orders
The factory orders in the World’s largest economy declined by 0.7% in December as compared to the same decline in the month before, down beating the average forecast of 0.5%, a government report revealed yesterday. Generally speaking, higher factory orders are considered positive for the US economy thus a worse than expected actual outcome spurred renewed bullish momentum in bullion’s price.
Considering the overall technical and fundamental outlook, buying the precious metal on dips near the $1180 support area could be a good strategy in short to medium term. The trade should however be stopped out on a daily closing below the $1180 support area.