Gold turns positive above $1,280/oz

Bullion higher on weaker USD.
Gold reverted the initial weakness.
Upside capped around the 21-day sma.

Pablo Piovano FXStreet

The ounce troy of the precious metal is now trading on a firm foot, currently navigating a narrow $8-range near $1,280.00.

Gold bounces off 6-day lows

Bullion gave away Monday’s gains after Chief J.Yellen left unchanged the likeliness of higher rates at the December 13 meeting at today’s policy panel organized by the ECB, although it later managed to revert the bearish momentum.

In fact, and according to CME Group’s FedWatch tool, the probability of higher rates to be announced next month is at just below 97%, based on Fed Funds futures prices.

In addition, Gold remains unable to gather some sustainable traction despite the greenback stays well into the negative territory today, with the US Dollar Index trading closer to the critical 94.00 support and US yields tumbling to daily lows in the 2.38% area.

Looking at the broad picture, the daily chart shows the yellow metal has been trading in a rangebound theme since mid-October, supported by the proximity of the 200-day sma, today at $1,266, while gains appear so far capped around $1,290.

Gold key levels

As of writing Gold is up 0.11% at $1,280.28 and a breakout of $1,289.50 (high Nov.9) would expose $1,292.90 (high Oct.20) and then $1,297.20 (55-day sma). On the other hand, the next support lines up at $1,270.59 (low Nov.14) followed by $1,265.99 (200-day sma) and finally $1,263.80 (low Oct.27).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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