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  • The precious metal depreciates more than $20 through the day, reaching levels below $1,700.
  • Gold prices decline amid risk appetite on economic recovery hopes.
     

XAU/USD has lost more than $20 on Wednesday and is set to depreciate beyond 2,5% over the last two days. Hopes that global economic recovery will accelerate in the second half of the year and a string of upbeat US economic indicators, have hurt bullion bets, driving XAU/USD to one-week lows at $1,695.

The US ADP has reported a 2.76 million decline on private-sector payrolls in May, beating market expectations of a 9 million and following a 19.5 million loss in April. Furthermore, according to the ISM Institute, economic activity in the US non-manufacturing sector bounced up to a 45.4 reading in May from April’s 41.8 low, also improving market consensus of a 44 reading.

The precious metal is testing support at $1,690/00 where the 50-day moving average meets 11 and 28-May lows. If that level is breached, bearish momentum might gain traction, driving the XAU/USD towards $1,640 (100-day SMA) and $1,575 (April 1 low and 200-day SMA).

On the upside, immediate resistance lies at $1,746 (June 2 high) and above here, next resistance might be at $1,785/00 late 2011 – early 2012 highs, which would open the path towards all-time highs at $1,920.

XAU/USD daily chart

XAU/USD daily chart