Gold plunges below $1200 mark as USD soars on stronger data

Gold plunged below $1200 psychological mark, for the first time since Feb., following the release of stronger-than-expected US durable goods orders.

Currently trading around $1190 region, the precious metal came under intense selling pressure after US durable goods orders surpassed even the most optimistic estimates and recorded a strong growth of 4.8% for October. Also, core durable goods orders (excluding automobile items) posted better-than-expected growth of 1.0%, while weekly jobless claims were mostly in-line with expectations.

Upbeat US economic data reinforced December Fed rate-hike expectations and provided an additional push to the already stronger greenback. In fact, the overall US Dollar Index reversed early dip and has now surged to fresh multi-year tops, the highest since early March 2003. A strong greenback tends to weigh on dollar-denominated commodities and is attracting fresh selling pressure around the precious metal. 

Later during NY trading session, FOMC minutes would take centre stage and further reinforce market expectations. Should the minutes turn-out to be more hawkish than expected, it might strart fueling speculations of additional Fed rate-hike and would continue dragging the commodity lower even from current levels.

Technical levels to watch

Sustained weakness below $1190 level is likely to exert further selling pressure and turn the metal vulnerable to immediately aim towards $1180 support before eventually dropping to test $1160 important support area. On the upside, any recovery attempt back above $1200 handle might now confront resistance at $1205 above which a fresh bout of short-covering might lift the metal back towards session peak resistance near $1215 level.

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