Gold – Stage set for monthly loss

Gold is trading flat in Asia on last trading day of the month, although at current price of $1317 levels the metal is way below the monthly opening price of $1356 levels.

Failure at long-term falling trend line

Prices failed earlier this month at the long-term falling trend line coming from September 2011 high and Oct 2012 high. The failure was largely due to expectations that Fed’s Yellen would talk up rate hike bets via her Jackson Hole speech.

Yellen did state the case for rate hike strengthened, which led to a broad based USD rally and pushed metal lower to $1308 levels.

Overall, the metal looks set for a monthly loss as a $50 rally from the current level appears unlikely eve if the Us ADP report prints horribly weak.

Gold Technical Levels

A breakdown of immediate support of $1308 (previous day’s low) would expose $1300 (psychological level). On the higher side, a breach of resistance at $1323 (Monday’s high) would open doors for a re-test of $1340 (Friday’s high).