Gold ends May 6% lower on Fed rate hike prospects

Gold managed to post a daily gain on Tuesday although it closed May around 6% lower, posting its first monthly loss of 2016, as speculation of a US rate hike in the coming months put a halt to the bullish trend that started this year.

The yellow metal recovered ground after flirting with $1,200.00 an ounce yesterday and trades now around $1,217/oz as risk aversion resurfaced along with Brexit fears, which fueled demand for safe-haven assets.

Gold technical perspective

“After a nine day in-a-row-decline, current spot's recovery is far from suggesting the slide is over, as in the daily chart, the price remains far below its 20 and 100 SMAs, whilst the technical indicators have barely their oversold conditions, and remain well into the red,” said Valeria Bednarik, chief analyst at FXStreet. “In the shorter term, the technical outlook is bullish, as the price is above its 20 SMA for the first time since May 18th, whilst the technical indicators head modestly higher above their mid-lines, suggesting the recovery may continue towards the 1,230.00 region.”

Support levels:  1,208.30 1,199.50 1,190.90. Resistance levels: 1,223.50 1,232.10 1,241.70.