Gold keeps falling amid risk-on rally in equities, US data eyed

The bearish pressure on the yellow metal accentuated in the European session, as markets cheer the risk-on rally in the European stocks amid broad based US dollar rebound.

Gold heads towards $ 1240 mark

Currently, gold drops nearly 1% to trade near fresh session lows of 1241.36, having broken the key psychological barrier at 1250. The bullion remains under heavy selling pressure as the traders prefer to take the yield advantage amid global risk-on trades further fuelled by strong Chinese exports and imports data. The European equities joined the global rally, with the German DAX up +2.12% and the pan-European benchmark, the Euro Stoxx 50 advancing +2.50%.

Further, markets also bid up the US dollar across the board on expectations of a rebound in the US retail sales and factory gate prices, both due for release in the NY session. The upcoming US data is expected to come in stronger and may back the case for a June rate hike, thereby, putting rest to the uncertainties surrounding the Fed rate hikes this year. Meanwhile, the US dollar index jumps +0.55% to 94.55 levels.

Gold Technical Levels

The metal has an immediate resistance at 1247.28 (1h 100-SMA) and 1250 (round number). Meanwhile, the support stands at 1240 (round number) below which doors could open for 1235.67 (1h 200-SMA).