Gold inched higher on Wednesday, increasing the price of the yellow metal to more than $1260 an ounce, the highest level in more than two years amid the uncertainty in the global financial markets after the Brexit vote. The technical bias remains extremely bullish because of a Higher High in the ongoing wave.
As of this writing, the yellow metal is being traded near $1267 an ounce. A hurdle may be noted around $1291, the swing high of March 2014 ahead of $1400, a major psychological level and then $1433, the high of August 2013.
On the downside, the precious metal is likely to find a support around $1323, the channel support ahead of $1300, the psychological number and then $1304, a major horizontal resistance area as demonstrated in the above chart.
US Factory Orders
New orders for the U.S. factory goods fell in May on a weak demand for transportation and defense capital goods, but growing order backlogs and lean inventories suggested the worst of the manufacturing downturn was probably over.
The Commerce Department said on Tuesday that new orders for manufactured goods declined 1.0 percent after two straight months of increases. May’s drop was in line with economists’ expectations and followed a 1.8 percent increase in April. The department also said that the orders for non-defense capital goods excluding aircraft fell 0.4 percent in May instead of the 0.7 percent drop reported last month. These so-called core capital goods are seen as a measure of business confidence and spending plans on equipment. Core capital goods shipments, which are used to calculate business equipment spending in the gross domestic product report, dropped 0.5 percent in May as reported last month.
Considering the overall technical and fundamental outlook, buying gold on dips still appears to be a good strategy in short to medium term.