Fourth-quarter GDP data validates the Federal Reserve's decision to taper its asset purchases, boosting hopes for a strong 2014. The commerce department said US GDP grew at a seasonally adjusted annual rate of 3.2% in the fourth quarter. Dow Jones rose 156 points on Thursday. US equities soared over 1% on strong GDP data. The USD strengthened and came back of equity market making gold drop 2%. After the currencies rebounded, gold traders stated selling off the metal. SPDR gold trust holdings stood at 792.56 tonnes. The South African labour court on Thursday declared a planned Association of Construction and Mineworkers Union strike in the gold sector. The risk of gold is that it becomes more vulnerable to the downside during this quarter period for physical demand. In India, uncertainty remains with regards to regulations. Gold premiums in India came off noticeably shortly after recent headlines highlighted the possibility of gold import rules changing in the coming months.
In the technical front, gold broken the falling lower trend line. Price is trading below 21DEMA and oscillators are still on the sell side in the daily charts; thus, we expect more room for down side. In the hourly chart, oscillators gave a pullback signal. Gold rebounds from oversold positions.
Support- $1,237, $1,230
Resistance- $1,248 $1,255
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