Gold drops below USD 1200/Oz

FXStreet (Mumbai) - Gold fell to a session low of USD 1197.4/Oz levels, as the USD index rose to a high of 100.10 levels.

Weak China data and Greek issue caps losses

The sharp rise in the USD index weighed over the metal, although the metal has been somewhat resilient due to weak China data and Greek issue attracting safe haven demand. Moreover, the sharp rise in the USD index was mainly triggered by a wave of selling the EUR/USD pair on reports that Greece could see another round of elections this month. Markets believe a strong majority for Syriza in re-elections could push Greece closer to ‘Grexit’.

Thus, the yellow metal has been resilient as fears of elections in Greece and Grexit triggers flight to safety – US Treasuries, German Bunds, and Gold. Earlier today, the disappointing Chinese trade figures had helped safe haven metal to restrict losses around USD 1204 levels.

Gold Technical Levels

At the moment, the metal is trading at USD 1199.4/Oz, down 0.44% for the day. The immediate resistance is seen at 1202 (5-DMA), above which gains could be extended to 1205.61 (10-DMA). On the flip side, a break below the daily low of 1197.4, could drive the prices lower to 1193.48 (50-DMA).