Gold holding steady around $1280 after Thursday’s sharp reversal

Following Thursday's sharp reversal from nearly 2-year high level of $1315 to settle back below $1280, Gold is seen rebounding on Friday to currently trade around $1283 level.

On Thursday, the precious metal extended its bullish momentum for seventh consecutive day on safe-haven demand, finding support from dovish Fed statement and uncertainty surrounding the UK-EU referendum. 

The metal, however, reversed sharply after the killing of Jo Cox prompted both sides of the UK-EU referendum to suspend their campaigns one week before the crucial vote on June 23. The yellow metal has recently benefitted from safe-haven flows led by elevating fears over the outcome of the 'Brexit' vote.

From technical perspective, the metal is trading below a nearly 15-months weekly closing level high level of $1291, provided in late-April, and has repeatedly failed to provide a daily closing above $1300 psychological mark. Hence, should the metal fail to provide a weekly close above $1290-91, traders might raise questions over the sustainability of the bullion's recent up-move.

Technical levels to watch

From current levels, $1277-75 zone seems to provide immediate support, below which the metal seems to extend its corrective move immediately towards $1262-60 horizontal support. Failure to hold $1260 support seems to force the yellow metal to head back towards retesting 50-day SMA support around $1250 region.

Meanwhile on the upside, $1290-92 area now seems to act as immediate resistance, which if conquered would confirm extension of the ongoing bullish momentum and assist the bullion back above $1300 psychological mark.