Gold drops to $1,223 and rebounds, remains in negative territory

Gold prices gained at the beginning of the day on the back of a slide of the US dollar an even traded above $1,230/oz. But then turned sharly lower losing more than $10 from day’s high. Recently bottomed at $1,223, the lowest level since last Thursday. Then rebounded and near the end of the session was trading at $1,227 far from the low but still down for the day. 

Price moved in a $16 price range despite the low volatility environment across financial markets.  Investors appear to be awaiting for the US mid-term elections outcome. The first results are likely to hit the wires around 00:00 GMT. 

XAU/USD Technical outlook 

“The daily chart for the bright metal shows that it's challenging a bullish 20 DMA, which continues advancing above the 100 DMA, while technical indicators remain in positive territory, although with the Momentum lacking directional strength and the RSI heading lower at 53, indicating decreasing buying interest,” says Valeria Bednarik, Chief Analyst at FXStreet. 

According to her, in the short-term the 4 hours chart, shows risk of a bearish extension increased as the metal broke below its 20 SMA and now nears the 100 SMA, as technical indicators turned south, while the Momentum still remains within neutral levels but the RSI accelerating lower at around 42.

To the downside, support levels might be located at 1,219.15, 1,211.90 and 1,203.80. While to the upside, resistance could be seen at $1,228 (Asian session low), 1,237.35 and 1,245.20.