Gold remains in a broader downtrend

Gold revisited December 6th high’s at $1265 today but shortly afterwards reversed its course and entered into NA session at $1259. As it is seen on the daily time frame XAU/USD bounced form the resistance turned into support at $1260 price zone and the current market price is $1261.50. However even having short term positive outlook, the price remains within the broad downward channel.  Meanwhile the price is about to cross to above the recent rising trend line, but even so, this will shift again focus back to the downside. According to indicators on the daily chart we may expect a flirt with the top side of the same channel and even higher resistance levels. But in the short term game remains bounded as the rising trend line may use a gauge for when price might turn back down. 

GOLD At two-week high

Yesterday’s FOMC minutes supported the gold prices on the back up of the notable USD weakness. The rate hike was postponed for December and the dovish tone of the central bankers reflected on sliding US treasury bonds yields, which supported the precious metal.  

XAU/USD is seen close to the very significant 1300.00 handle today and had marked daily high at 1297.50. On the four hour time frame the prices is moving well above its bullish 20-day SMA, while indicators are giving mixed signs. Stochastic is retreating from its extreme overbought territory, but yet remains above 80. RSI is located above its mid-line and is has lost directional strength.  Ahead of US PPI data and the weekly jobless claims gold prices are vulnerable to retreat lower in case of having better than expected numbers.  

First support is seen at 1290.00 and in case of breaking, door are opened for testing 1280.00. Looking to the upside, first resistance come at 32.8% Fibo of latest July to September bullish run around 1300.00 mark. If bulls succeed to conquer it, next target will be the 1310 – 1320 area.

Rise and fall

During the European session gold price skyrocketed and tested the $1280 area. It is quite explicable as the precious metal is moving opposite to the US dollar, that was seen weaker today because of a set of disappointing data out of the USA right before the FOMC. 

After Fed’s rate decision bears took back the control and dragged rates down and the current market price is $1257. So after marking five-day high, XAU/USD lost %0.65 or around $8 for the day. 

On the four hour time-frame the price surpassed to below the 20-day and 100-day SMAs and meanwhile remained above the flat 200-day SMA, which is acting as a strong support, currently being at $1255. 

RSI moved today slightly above the mid-line but later had sharply turned to south. Stochastic had retreated from the extreme overbought territory and is displaying strong bearish momentum. 

First support is located at $1255 and next is seen at $1240.Looking to the upside resistance is seen at $1269 (100-day SMA) higher at $1280 (the intraday high). 

Gold At Three Month High

As both Europe and USA are overtaken by political woes and uncertainty is rising, investors are eyeing precious metals. Gold prices resumed the upward movement and yesterday marked the highest level since November at $1244. 

Technical indicators have modestly retreated from the overbought region. As seen on the four hour frame RSI is located slightly below 70 and is showing lack of momentum. Stochastic is displaying modest bearish direction, but yet is within extreme overbought area.

Short-term support is found at $1230 (50% Fibonacci rertracement of latest $1137 to $1122 decline). Next support is seen at $1204 (38.2% of same retracement).

To the upside bulls are thrilled by $1245 (a multi month high) and if conquering this level, next target is the resistance at $1255 (61.8% Fibo). 

Among this political uncertainty, a march towards the $1300 handle seems to be quite possible, due to the increased demand for safe-heaven assets.