- Gold price declined heavily during the past few days and broke the $1230 support area against the US Dollar.
- The price recently traded as low as $1218.50 from where a minor recovery has started.
- Today in China, the Caixin Services PMI for June 2017 was released.
- The outcome was disappointing, as there was a decline from the last reading of 52.8 to 51.6.
Gold Price Technical Analysis
There were further declines in Gold below $1240 against the US Dollar. The price failed to recover recently and broke an important support area at $1230.
There were a few trend lines break at $1248 and $1240 on the hourly chart to ignite a downside wave towards $1220.
The price traded as low as $1218.50 from where a minor recovery has started.
Gold Price Hourly Chart
The price recently managed to move above the 23.6% Fib retracement level of the last decline from the $1248 high to $1218 low.
However, there is a major bearish trend line at $1228 on the same chart, acting as a barrier for buyers and preventing further gains.
There is a chance that the price might head towards the 38.2% Fib retracement level of the last decline from the $1248 high to $1218 low at $129. However, it can be considered as a sell opportunity near $1230.
As long as the price is below $1230-38, there are possibilities of more declines back towards $1220.
Caixin China Services PMI
Today in China, the Caixin Services PMI for June 2017 was released. The forecast was lined up for a minor rise from the last reading of 52.8 to 52.9.
The actual result was disappointing, as there was a decline from the last reading of 52.8 to 51.6. Moreover, the Composite Output index also registered a decline from 51.5 to 51.1 in June 2017 to post the slowest rate of expansion in a year.
The report added that:
Latest data indicated that the slowdown in overall growth was driven by a weaker performance of the service sector. The seasonally adjusted Caixin China General Services Business Activity Index posted 51.6, down from a four-month high of 52.8 in May, to signal the second-slowest increase in activity for 13 months (after April 2017).
Overall, gold price may correct a few points towards $1230, but remains in the bearish zone for more declines in the near term.