Gold looks for a second straight day of gains
As the dollar stays offered today, gold is once again benefiting from that as bullion prices look set to post two straight days of gains for the first time since mid-June. The bounce yesterday came as the dollar weakened due to an improvement in risk sentiment after having traded near the December low @ $1,236.55.
Looking at the near-term chart, we can see that the highs yesterday was capped by the 200-hour MA (blue line) as buyers were unable to establish a more bullish near-term bias in gold. But trading today saw buyers finally break above that and even managed to lean on the key level for support as price moves higher again now.
This is the first time since 15 June that gold trades above both the 100 and 200-hour moving averages.
And the fact that buyers are able to lean on the 200-hour MA for such a move is encouraging for upside potential. This despite the fact that the trade rhetoric is still weighing on equities and helping give the yen a boost (usually risk-off tones see the dollar also gaining). But the fact that the dollar is offered against the yuan also has to be considered in all of this - and that for me is the big thing weighing on the greenback so far today.
Right now, topside resistance is seen @ $1,265.30 - the 38.2 retracement of the recent swing to the downside from 15 June to 3 July. There's also minor resistance levels around $1,261.50 to $1,262.20 but the 38.2 retracement level is the one I reckon will be more of focus.
As long as buyers hold above the 200-hour MA, then near-term move still favours the upside for now.
