Gold is at a cross-roads while below R1 $1,234.58/oz
|- After three weeks of an uptrend, Gold bulls have been a little cautious on the way to the July highs with RSI shying away from the overbought territory on both the daily and 4hr sticks. Gold is currently oscillating at $1,225/oz around the pivot having failed twice at R1 $1,234.58/oz.
Gold has picked up the idle capital that investors took out of the equities following last week's rout on Wall Street and had capitalised on the weakness of the greenback that has been testing the bull's commitments at 95 the figure in the DXY.
On Tuesday, the U.S. stock market was in recovery mode and performed very well which was limiting the gains for the precious metal. However, a full-on correction may not be unfolding in gold considering the number of geopolitical risks that have also been priced in.
Dollar outlook
There is still room for the dollar to revisit the recent highs while US economic growth estimates are being revised upwards. While there is the argument that we are on the way to the Fed's neutral target, no one knows as to where peak rates might be considered and thus the dollar can play catch up with higher yields. However, a break of the 95 handle tot he downside will certainly be a plus for gold and commodities in general.
Gold levels
Bulls are looking for a break and hold above 1233 ahead of the 252 127.2% extension ahead of the $1,278 level, as the 161.8% extension. $1,320 and the $1,236 are also key objectives through the rising trendline support through $1,281, 28. May low. On the flip-side, a break of the recent lows of $1,216.50, the 38.2% Fibo is located around $1,209 guarding the 50% Fibo of the 8th Oct bid falls in at $1,204.
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