Gold trading with mild weakness, but remains closer to three-month highs

Gold traded with mild negative bias for the second consecutive session on Wednesday but remained closer to its highest level in about three months. 

Currently trading around $1231 region, spot edged lower in wake of ongoing US Dollar recovery, which tends to pressurize dollar-denominated commodities - like gold. However, political instability in Europe, ahead of the French elections, and uncertainty over the US President Donald Trump’s political agenda supported the precious metal's safe-haven appeal and has limited any sharp downslide, at least for the time being.

Meanwhile, fading expectations of additional Fed rate-hike action in the near-term, leading to lower US Treasury bond yields, is also underpinning demand for the non-yielding yellow metal. 

Immediate focus would remain on the awaited decision in the federal court over Trump’s executive order on immigration, which will is likely to have a big impact on gold and the US Dollar.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes, "1235...1236 is the level we need to break...now...and if we can break above here we can actually move higher and go sniff the 1255 area...but spookily enough we can see that the 61.8 Fib level is located at 1255 so this is tying in nicely with our resistance...and markets usually do correct back from this particular Fib level...Now if it doesn't and we break 1255 we look for 1265 to 1272...."

She further writes, "If today we fail to break the 1236 barrier look for a retracement back towards the 1218/16 support...we are buyers on weakness to here and we will hold unless Gold moves back below 1212...If 1212 lost we look for 1206/04 which as we know has offered excellent support and a good base to instate longs..."