Gold erases daily gains and drops toward $1255

By FXStreet Gold was unable to hold to gains and pulled back, trimming a portion of yesterday’s gains. A weak US dollar failed to boost gold prices on Thursday.

The ounce peaked during the European session at $1,270.90 and then it was unable to hold above $1,270.00. Initially pulled back to $1,260.00 and then stabilized. Recently it broke to the downside and reached a fresh session low at $1,256.70.

Despite falling $15 during the last hours, gold still trades significantly above the level it had before the FOMC decision, when it was hovering around $1,230.

Technical outlook

“The daily chart shows that the price has held well above a bullish 20 SMA, while the Momentum indicator resumed its advance within positive territory, and the RSI indicator hovers around 58, lacking directional strength”, says Valeria Bednarik, Chief Analyst at FXStreet.

She notes that the 4-hour chart shows indicators retreating from near overbought levels, “while the price remains above its moving averages, suggesting some further downward corrections in the short term, towards the 1,240 region.”
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Source:: FX Street