Gold off highs, still heads for the highest close in almost three months
|- Yellow metal losses momentum during American session as US yields rebound and Wall Street trims losses.
- The rally found resistance below $1,240 and pulled back to $1,230.
Gold jumped to $1,239/oz earlier today hitting the highest level since July 17 and the pulled back trimming gains. The move higher was boosted by demand for safe-haven assets and also technical factors.
The retreat from the top took placed as Wall Street moved off lows and risk sentiment improved. The slide so far found support at $1,230 but that level was being challenged from the upside as US yields accelerate the move higher.
The breakout of a 6-day trading range to the upside, also contribute to the spike higher. The rally in gold lost strength near the $1,240 zone. Despite moving off daily highs, XAU/USD was still headed toward the highest close since July 25.
Technical outlook
Gold surged above the top of its latest range but settled right below it, retaining a mild-bullish stance according to the daily chart, given that the price remains above its 20 and 100 DMA, with the shortest extending its gains below the larger ones, points out Valeria Bednarik, Chief Analyst at FXStreet.
She notes that technical indicators remain near their recent highs, with the Momentum easing modestly, amid the lack of follow-through and the RSI aiming to regain the upside, currently at 63. “In the 4 hours chart, the metal is well above its 20 SMA, which slowly turns up but overall remains neutral, as technical indicators re-entered positive ground before losing upward strength, leaving a neutral-to-bullish stance.”
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