Yellow metal heads for the highest close in three months. Price keeps hovering around $1,230/oz with a positive outlook.
Gold prices are about to post a modest the second daily gain in-a-row but the bullish tone eased amid risk aversion. The price peaked during the Asian session at $1,233/oz and then quickly dropped, finding support above $1,225 on European hours. Since then it has been moving sideways around $1,230.
While technical indicators and the tone points to the upside, with the yellow metal holding to most of its recent gains, gold is facing resistance amid a stronger US dollar on the back of risk aversion. On the flip side, an extension of the correction from yesterday 3-month high at $1,239 finds support on the back of lower US yields.
XAU/USD Technical outlook
“Technical readings in the daily chart support the ongoing advance, as the 20 DMA is currently crossing the 100 DMA, both around 1,212.40, while the Momentum indicator resumed its advance and the RSI consolidates, both near overbought readings”, said Valeria Bednarik, Chief Analyst at FXStreet.
According to her, the 4 hours chart, shows the metal offering a neutral-to-bullish stance, as technical indicators remain directionless above their midlines, while the price bounced a couple of times from a flat 20 SMA. “The larger moving averages in this last time frame maintain their bullish slopes well below the shorter one.”
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