17 Jun 2015
Gold extends gains to USD 1188 as Yellens states gradual rate hike path
FXStreet (Mumbai) - The bid tone on the yellow metal strengthened further, taking prices higher to USD 1188/Oz levels, after Fed chief Yellen indicated the economy is expected to warrant a gradual rate hike.
Gold rises as USD index falls
The metal strengthened as the USD index extended losses to trade 0.76% lower at 94.50 levels. Gold also received support from the drop in the 2-year yield, which mimics short-term interest rate expectations. The yield currently trades 2.1 basis points lower at 0.669%. A drop indicates that the markets believe the rate hike path would be more gradual than expected earlier. Consequently, gold prices moved higher.
Still, the gains are being capped at the moment around USD 1188-1189/Oz as the Fed is still on track to raise rates twice this year. Earlier today, the metal jumped from the low of USD 1175.9 after the Fed revised the 2015 GDP forecast and end-2016 median interest rate forecast lower.
Gold Technical Levels
The immediate resistance is located at 1192.63 (50-DMA), above which the gains could be extended to 1202.78 (200-DMA). On the flip side, a break below 1182.06 (hourly 200-MA) could push the prices down to 1178.58 (hourly 50-MA).
Gold rises as USD index falls
The metal strengthened as the USD index extended losses to trade 0.76% lower at 94.50 levels. Gold also received support from the drop in the 2-year yield, which mimics short-term interest rate expectations. The yield currently trades 2.1 basis points lower at 0.669%. A drop indicates that the markets believe the rate hike path would be more gradual than expected earlier. Consequently, gold prices moved higher.
Still, the gains are being capped at the moment around USD 1188-1189/Oz as the Fed is still on track to raise rates twice this year. Earlier today, the metal jumped from the low of USD 1175.9 after the Fed revised the 2015 GDP forecast and end-2016 median interest rate forecast lower.
Gold Technical Levels
The immediate resistance is located at 1192.63 (50-DMA), above which the gains could be extended to 1202.78 (200-DMA). On the flip side, a break below 1182.06 (hourly 200-MA) could push the prices down to 1178.58 (hourly 50-MA).