Gold rejected again from above $1,230, erases daily gains
|- Yellow metal remains unable to extend rally above $1,230/oz.
- Stronger US dollar during the US session pushed XAU/USD back to the $1,225 area.
Gold is about to end the day flat, although consolidating most of the gains of last week and yesterday. Today peaked at $1,232/oz but after the beginning of the US session pulled back to the $1,225 area. The rally in gold that started last week from $1,185 is currently on pause, with price consolidating near $1,230.
The move off highs during the American session, took place on the back of a stronger US dollar against the yen and European currencies and amid a rally in Wall Street. The Dow Jones was rising 1.80% and the Nasdaq 2.45%.
Technical outlook and levels to watch
For the second day in-a-row, XAU/USD failed to hold above $1,230. So far, the correction has been limited and the $1,230 zone is becoming a key resistance. According to Valeria Bednarik, Chief Analyst at FXStreet, the metal retains its bullish stance as technical readings in the daily chart show with price above the 100 DMA and while the 20 DMA gains upward traction below it.
“Indicators in the daily chart have lost directional strength but hold near overbought readings. In the shorter term, and according to the 4 hours chart, the metal could correct lower, as despite holding above a bullish 20 SMA, the indicator is losing upward strength, while the Momentum and the RSI ease within positive levels. Such scenario seems likely on a break below 1,223.40, the immediate support”, added Bednarik.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.