Gold surprised everyone by posting a whopping rally of more than $60 an ounce and then retracing all the gains just hours after the landmark elections in the United States. Market experts were expecting gold to continue upside rally amid global economic uncertainty after the US polls but the yellow metal followed the footsteps of technical levels and rebounded sharply after testing the monthly trendline support area.
As of this writing, the precious metal is being traded near $1261 an ounce. A huge support is being noted around $1200 which is a confluence of psychological number as well as a major horizontal support. We may see a short term pullback from the $1200 support while a break and daily closing below $1200 shall incite renewed selling pressure, validating a downside move towards the $1141 and then $1050 support zone as marked in the given below chart.
On the upside, the yellow metal is expected to face a hurdle near $1292, the intraday high of yesterday ahead of $1337, the monthly trendline resistance and then $1343, a major horizontal resistance area. The technical bias shall remain bearish for long term as long as the $1795 resistance is intact or atleast the monthly trendline is unbroken
Fed Monetary Policy Outlook
After the landmark polls in the United States, all eyes are now focused on the monetary policy by the Federal Reserve which is due next month. Experts believe that the central bank may skip the long awaited interest rate hike yet again in December because of the economic uncertainty after the new government.
Considering the overall technical and fundamental outlook selling the precious metal on rallies around $1300 zone still appears to be a good strategy in short to medium term.
* FXOpen International, best ECN broker of 2021, according to the IAFT