Gold rises again but remains limited below $1210

A weaker US Dollar helps gold hold above $1200.
Upside still remains capped with price unable to break $1210.

Gold rose modestly on Thursday on the back of a slide of the US dollar but the upside continues to be limited. The outlook ahead of the Asian session is positive, although not showing much strength.

The ounce peaked at $1,208.30 earlier today and then pulled back finding support at $1,203. Near the end of the session was hovering around $1,205, about to post the highest close in a week.

“The shallow advance can be attributed to absent demand for the greenback, as gold remains out of speculative interest radar, given the appetite for high-yielding assets. The Dollar Index fell to an almost three-month low, preventing gold from falling rather than providing support, a sign that demand remains well limited”, says Valeria Bednarik, Chief Analyst at FXStreet.

Technical outlook

For the third day in a row gold made a higher high and a higher low for a third, signaling a neutral-to-positive stance while at the same time holds above the 20-day moving average. The outlook is also positive in the short term but it needs to break and consolidate above the $1,208-$1,210 area in order to clear the way to more gains and for a test of late August highs slightly below $1,215.

A slide below $1,200 would remove the positive short-term outlook but the downside is likely to remain limited while the metal holds on top of $1,190. A break lower could target $1,182.

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