Gold is losing altitude in Asia, having repeatedly failed to take out the 50-day exponential moving average (EMA) last week.
The People’s Bank of China (PBOC) said on Sunday that would cut the amount of cash that banks must hold as the reserve to lower financing costs and spur growth in the world’s second-biggest economy. The 100 basis point cut in the reserve requirement ratio (RRR) will come into effect from Oct. 15 and will inject a net USD 109.2 billion in cash into the banking system.
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Interest rate cuts usually put a bid under gold, however, the PBOC’s decision to cut rates for the fourth time in 2018 isn’t boding well for the safe-haven yellow metal.
At press time, gold is trading at a session low of $1,195/Oz, having clocked a high of $1,204 earlier today. Technically speaking, the yellow metal risks falling back to the September low of $1,180, having repeatedly failed to beat the 50-day EMA last week.
Gold Technical Levels
Resistance: $1,200 (psychological level), $1,206.67 (50-day EMA), $1,214 (Aug. 28 high)
Support: $1,192 (Sept. 21 low), $1,180 (September low), $1,160 (August low)
