The bullion was trading weaker on Friday and was 0.25% lower during the midday session. The price was hovering around the psychological level of 1,300 USD and was trying to defend it after yesterday’s failure to rise above the 200 day moving average.
The euro zone inflation was kept at 1.9% for May, as was expected, while the core inflation gauge stayed at 1.1%. The yesterday’s ECB meeting sounded dovish for investors as the ECB is about to keep rates unchanged till at least summer 2019, and the QE will end in December.
Traders sold the euro sharply and the EURUSD pair dropped the most since Brexit. Stronger dollar weighed on the bullion and it failed to hold intraday gains and turned lower, with this sentiment prevailing on Friday as well.
The US calendar will offer only capacity utilization and industrial production, which could move the US dollar, but gold usually ignores these numbers.
Yesterday’s failure at the critical resistance near 1,308 USD looks like a bearish signal as the reversal was steep. This is still the major selling zone and as long as the bullion stays under, the outlook seems neutral.
Gold is still trying to defend the key bullish trend line, which is around 1,295 USD. If not held, the longer-term bullish trend could be cancelled, targeting May’s lows around 1,282 USD. In all cases we strongly recommend to have rigorous money and risk management.
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