iNVEZZ.com: Monday, February 24th: The XAU/USD has today edged higher to get past last week’s nearly four-month top of $1.332.10 an ounce. Today’s ongoing intraday high is at $1,334.15 and right now gold is trading at $1,333.50, up 0.9 percent.
The gold price is being supported by fresh concerns over the strength of the rebound in the US economy, the world’s largest, and by continuing turmoil in emerging markets.
“It remains to be seen if recent weakness in US economic data is really due to the weather or if it’s something investors should be more concerned with,” writes Everbright Futures macroeconomic strategist Sun Yonggang.
“Gold is getting some flows from risks in emerging markets but is looking increasingly overbought,” Yonggang notes, adding that increased gold prices “also turn off physical buyers, the most sensitive part of demand”.
Spot gold in today’s Asian session hit what remains an intraday low at $1,318.66 an ounce, but has since been recovering. At its current pricing, the precious metal is more than 10 percent up from the start of the year.
The XAU/USD is also supported by its 89- and 200-period simple moving averages, which are floating below the price action on the 1H, 4H and daily charts. The MACD (9, 12, 1) indicator is also positive on those charts, signalling bullish sentiment.
“I think $1,335 seems to be capped for the time being,” writes Hong Kong’s Lee Cheong Gold Dealers chief dealer Ronald Leung, in reference to the next level of resistance.
“There are small amounts of buying in the physical side, although selling is also not that much. Premiums haven’t changed at all.”
Premia for gold bars in Hong Kong were unchanged today from last week, within the range $1.30 to $1.70 an ounce to London spot prices.
But gold premia in Singapore were also unchanged from last week, at $1.20 to $1.50 an ounce above London spot prices. Singaporean dealers are reporting that physical buying is slow.
Meanwhile, physical holdings at the world’s biggest gold-backed exchange-traded-fund, New York’s SPDR Gold Trust, rose 0.34 percent on Friday and are currently at 798.31 tonnes.
Precious metal trading will likely be cautious this week ahead of US GDP data, due out along with Durable Goods Orders and consumer confidence.
Of the 23 participants who responded to the most recent Kitco News Gold Survey, 19 saw prices rising this week, while two respondents saw prices down and two predicted sideways trading.
Resistance levels today: $1,330.00, $1,335.00, $1,341.10, $1,350.00 and $1,361.50.
Support: $1,323.20, $1,307.00, $1,300.00, $1,296.00 and $1,293.20.