Gold falls as dollar strengthens

Gold turned south this Wednesday, as stocks rallied on the back of better-than-expected economic data out of China fueling risk appetite and boosting the greenback. After advancing for four days in-a-row, spot ended the day around $ 1,244.00 an ounce, down by over $20.00 from the weekly high set at $1,262.62.

Gold technical view

“The daily chart shows that the mentioned high matches the one set on February 11th, establishing the second shoulder of a H&S figure, whilst the neckline stands around 1,200/1,205, the level to break lower to complete the mentioned figure, which has long term bearish implications, as it will suggest an approach to the 1,100.00 region,” said Valeria Bednarik, chief analyst at FXStreet. “In the same chart, the technical indicators have turned south, but remain above their mid-lines, whilst the 20 SMA stands around 1,232.70. Shorter term and according to the 4 hours chart, the bias is towards the downside, as the technical indicators head sharply lower within negative territory, whilst the price continues sliding below its 20 SMA, now around 1,250.60.”

Support levels: 1,232.70 1,223.05 1,214.60. Resistance levels: 1,250.60 1,262.60 1,271.90.