Spot gold prices are trading narrowly lower Monday as the market pauses after posting 3% gains during Friday’s session, gold’s biggest single day rally in a month. Some medium term pressure on the precious metal still remain as prices continue to struggle to establish themselves above the $1600 level. Prices in Asian this morning drifted to highs of $1599.90 a troy ounce, and steadily declined to session lows of $1589.22 in tandem with a correction back in FX pair EUR/USD, pressured by the continued weakness in China’s official manufacturing PMI data. Market participants of gold will be waiting to see if European markets give back some of Friday’s risk rally and will also be closely watching the progress of the U.S. dollar to see if any haven flows start going back towards the world’s most liquid currency. Some minor short-term support for gold remains at $1584 with better size bids defending the $1570/72 area. Some exporter offers are creating a band of resistance around $1602/05 with more aggressive offers expected above at $1614/16. Spot gold is currently trading $1592.70, down $4.7 on the day.
EasyForexNews Research Team