Gold strengthens on dismal China data

Gold prices rose to a session high of $1260/Oz after China reported dismal September trade figues.

Rebounds from 23.6% Fibo

Prices rebounded from $1253 (23.6% of Sep 2011 high – Dec 2015 low) on the back of haven demand post china data release. Still, the metal is having a tough time extending gains above $1260 levels, given the consensus in the markets that would hike rates in December.

The area above $1260 has acted as a strong resistance since last Friday’s sell-off. Later in the day, the action in the European stock markets, US weekly jobless claims and Fed speak could offer cues to the metal traders.

Gold Technical Levels

Acceptance above $1265 (Oct 10 high) would open doors for $1270 levels, above which prices could target $1277 (Oct 5 high). On the lower side, breach of $1253 (23.6% of Sep 2011 high – Dec 2015 low) could yield a re-test of $1241 (Oct 7) under which a major support is seen directly at $1224 (Apr 14).