Gold Analysis : The precious metal had climbed to a year-high of $1,263.58 on Thursday

The precious metal had climbed to a year-high of $1,263.58 on Thursday as turmoil in global equities stoked safe-haven demand for the yellow metal, along with the U.S. dollar weakness. Bullion was also fuelled by growing expectations that the Federal Reserve would not raise interest rates this year. Gold prices rose more than 15% so far this year,around $188 an ounce to $1,263,the highest price since February 2015 and an a $217 jump per ounce since December 2015. Gold prices jumped 5% the previous week, upping its year-to-date gains to more than 15%.

The precious metal continues on its strong incremental advance, recording lower lows – weekly chart – on a path to higher highs – daily chart – that the previous week saw it decisively breach the descending trend line which started back in mid-2013. It should be noted that the commodity is also trading above the weekly 50-SMA as well as, above the psychological level of $1,200.

Going forward, gold prices retreated from the Thursday high of $1,263 and spent the day slightly above the descending trend line, around $1,215. The momentum indicators do remain overbought so further losses may lie ahead which could potentially see a break below the descending trend line, near the $1,205 for a return to $1,200 and then at the psychological level of$1,200.Under here seems unlikely for the moment but further losses would target $1,143. On the topside, resistance will be seen at $1,260 and again at $1,263. I do not think we go above here again for a while, since both the short-term charts and indicators are now overbought. If the aforementioned resistance levels do get taken out, there is then not too much to stop it heading towards the critical level of $1,310, beyond which could then approach $1,345, which coincides with the 200-SMA on the weekly chart.