Gold drops 0.30 percent on USD strength

Omkar Godbole FXStreet Contributor

Broad based USD rally in Asia pushed gold (XAU/USD) prices lower by 0.30 percent to $1282.60.

Higher low pattern still intact

Yesterday's solid rally from the low of $1276.57 to $1291 left a higher low on the daily chart. Only a break below $1276. 57 would signal a revival of the sell-off from Monday's high of $1306.

The data docket is light, hence the focus remains on the treasury yields and the US dollar. Both could remain well bid on Trump's tax reform plans. Escalation of tensions in Spain and/or Korean Peninsula may strengthen the demand for the yellow metal.

Gold Technical Levels

The metal was last seen trading around $1284 levels. A break below $1276.57 would open doors for a sell-off to $1266.38 (Oct 5 low) and $1264 (200-DMA). On the higher side, breach of hurdle at $1291 (10-DMA) would open up upside towards $1300 (psychological level) and $1303.50 (50-DMA).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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