Gold extends rally in Asia, $ 1250 tested

By FXStreet Gold futures on Comex rose sharply higher in the Asian trades this Tuesday, as a classic risk-off theme prevailed amid softer performance on the Asian stocks and poor Chinese PMIs.

Gold trades above all DMAs

Currently, gold trades 1% higher at 1246.50, having reached fresh weekly highs a whisker away from 1250 mark. The bullish run in the yellow metal found fresh legs after the sentiment was once again hit by poor economic data from China, with manufacturing PMI reports from both NBS as well as Caixin showing further contraction.

Moreover, China’s rate cut announcement combined with increasing safe-haven flows collaborated to the upside in the gold prices. Holdings of SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, rose 1.95% to 777.27 tonnes on Monday, the highest since September 2014. While American Eagle gold coin sales in February more than quadrupled y/y as bullion prices surged, US Mint data showed on Monday.

Markets now eagerly await the US payrolls data, especially after the upbeat US Q4 GDP, PCE, durable goods and personal spending data, for further insights on the Fed rate hike prospects for 2016.

Gold Technical Levels

The metal has an immediate resistance at 1249.30/1250 (Daily High/ psychological levels) …read more

Source:: FX Street