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Gold drops sharply to hourly 50-SMA

FXStreet (Mumbai) - The yellow metal halted its upmoves and witnessed a sharp downward spike in last hours, moving further away from fresh multi-month tops reached at 1176 levels ahead of European open.

Gold drops more than $ 10

Currently, gold trades 0.21% higher at 1167.60, recovering from 1164.20 session lows. Gold ran through fresh offers near the hourly R2 and rebounded sharply lower to the hourly 50-SMA support located at 1164.06, only to swing back higher towards 1170 mark now.

The bullion dropped sharply as markets viewed the recent non-stop upsurge at excessive and booked profits ahead of the key US retail sales and PPI figures due later today.

Moreover, stabilizing European equities coupled with mounting concerns over the Chinese economic recovery also dulled gold’s allure as a safe-haven.

Meanwhile, the US dollar continues to remain undermined against its major competitors, with the USD index now losing -0.232% at 94.59.

Gold Technical Levels

The metal has an immediate resistance at 1176 (Today’s High) and 1179.23 (hourly R2) levels. Meanwhile, support stands at 1164.06 (hourly 50-DMA) levels below which doors could open for 1161.86/94 (200-DMA & 5-DMA).

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