Gold remains capped below $ 1350, US ISM PMI in focus

Gold failed to sustain above 1250 mark in Asia and now edges lower post-European open, correcting heavy gains booked last Friday in wake of poor US Q2 GDP figures.

Gold eases from two-week tops

Currently, gold trades -0.20% at 1348, having posted day’s low at 1346.22 and day’s high at 1351.76. The gold prices fell back in the red this session on the back of improved sentiment, triggered by risk-on rally in the European equities.

Moreover, a minor-recovery staged by the US dollar versus its six major competitors, also added to the selling pressure seen behind the yellow metal. On Friday, the bullion rallied to fresh two-week highs of 1355.05 after the greenback was hit badly across the board in response to worse-than expected US GDP report.

The US economy grew at an annualized pace of 1.2% of GDP in Q2, up from 1.1% hike seen in the first quarter. Market had predicted an acceleration to a 2.6% rise in the second quarter.

Meanwhile, the precious metal paid little attention to upbeat Chinese Caixin manufacturing PMI report, which bettered expectations by over full 2 points. China is the world’s largest gold consumer.

Next in focus remains the US ISM Manufacturing PMI report due later in the NA session, which will provide further momentum on the USD, eventually impacting gold

Gold Technical Levels                                   

The metal has an immediate resistance at 1355.05 (2-week highs) and 1360 (round number). Meanwhile, the support stands at 1340 (20 & 5-DMA) below which doors could open for 1331 (10-DMA).