Gold rejected at 100-DMA in Asia

Gold prices recovered from the overnight low of $1214.16, but failed to cut through the 100-DMA hurdle of $1224.83 levels.

June Fed rate rise odds weigh over gold

The CME fed funds futures data shows the probability of a June rate hike now stands at 83.1%. The Fed policy makers have talked about potential Fed balance sheet normalization later this year.

Furthermore, the geopolitical tensions have cooled as well. The combined effect is weaker gold prices.

However, the daily RSI is now oversold, which means the odds of a technical correction cannot be ruled out.

The Chinese data released today showed the deceleration in the PPI. The yellow metal could catch a bid wave if the global markets turn risk averse in response to the weaker-than-expected China PPI data.

Gold Technical Levels

The metal was last seen trading around $1227/Oz levels. A break below $1214.16 (previous day’s low) would expose $1209.14 (50% Fib R of $1122.81-1295.46) and $1200 (psychological level). On the other hand, a break above $1224.83 (100-DMA) could yield $1229.51 (38.2% Fib R of $1122.81-1295.46) and $1236.51 (May 8 high).