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Gold drops to $ 1171 as China GDP boosts sentiment

FXStreet (Mumbai) - Gold prices on the Comex dropped sharply in Asia, after booking weekly gains last week, as upbeat Chinese GDP data eased concerns over China's growth prospects, dulling gold’s demand as a safe-haven.

Gold drops below hourly 100-SMA

Currently, gold trades 0.95% lower at 1171.90, hovering close to fresh session lows struck at 1171.10 last minutes. Gold came under renewed selling pressure and now looks to test the key support – 1170, after the better than expected Chinese GDP figures eased the downside risks to the economy and boosted the risk-on trades. Thus, diminishing bids for safety assets such as yen, gold etc.

Moreover, the bullion remains pressured on the back of uncertainty over the Fed rate-hike timing amid a string of mixed US economic data released last week.

However, keeping the sentiment around the bullion buoyed, hedge funds and money managers raised their bullish bets in COMEX gold and silver to near five-month highs in the week ended October 13, US CFTC data showed on Friday.

In the day ahead, the yellow metal will track the sentiment on the European and the US equities for further momentum, in absence of any macro data.

Gold Technical Levels

The metal has an immediate resistance at 1176.77 (daily pivot) and 1180.30 (5-DMA). Meanwhile, support stands at 1170/1168.85 (Round number & 10-DMA) below which doors could open for 1161.43 (200-DMA).

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