Gold retreats but finds support near $1230
|- A stronger US dollar pushed gold prices further to the downside during the US session.
- XAU/USD still on track for highest weekly close since July.
Gold rose earlier today to test monthly highs near $1,240/oz but lost strength and pulled back. The retreat from the top, continued after the ECB meeting and during the American session, amid a stronger US dollar against majors and despite an improvement in risk appetite.
The metal bottomed recently at $1,228 and as of writing was hovering around $1,230, down $3 for the day, but still up for the week and holding a bullish tone. The rally that started fifteen days ago, in order to continue, needs to see a breakout above $1,240.
Technical outlook
“The daily decline has left the metal barely up for the week, but retains its bullish stance in the daily chart, as spot gold continues developing above its 20 and 100 DMA, with the shortest advancing above the larger one”, says Valeria Bednarik, Chief Analyst at FXStreet. She adds that the Momentum indicator is advancing into overbought levels, while the RSI continues consolidating around 60.
Ahead of the Asian session, the 4 hours chart shows the metal poised to extend its decline, now trading below a flat 20 SMA and as technical indicators head sharply lower, challenging their midlines straight from overbought readings, explains 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.