Gold Up

Gold posted some gains after the expected US dollar correction. The precious metal traded heavily on the downside last week and only on Friday did it manage to gain some strength and push through the bearish resistance to post a green candle.

Last week we saw the US dollar appreciate rapidly after comments by ECB President Mario Draghi on future outlook on EU policy. EUR/USD lost some 200 points in the day of announcement and continued to trade in the low range below 1.1580-1.1630.

Now that the US dollar is going through a correction, Gold has the chance to shine again,if only for a while. The recent gains do not seem appealing and the precious metal is still vulnerable to bear attacks. Price shoot up from $1,263 to $1,278 but now it's trading at $1,274.

If price breaks support at $1,260 then we might be heading towards long term support at $1,250. If that level is broken, then we might close the year below $1,200.

Chart: XAU/USD H4