Gold peaked during the US session at $1,278.80/oz and then pulled back modestly, finding support at $1,275. Near the end of the session, it was hovering around $1,276 headed toward the second daily gain in a row.
The yellow metal continues its recovery after falling on Friday to $1,262 the lowest in three weeks. The area around $1,260 offered again support and XAU/USD rebounded. Still, the negative tone prevails but price moved away from the key $1,260 area.
No relevant economic reports from the US will be released tomorrow. On Wednesday, private sector employment data is due with the ADP report and also the FOMC decision. The week will continue on Thursday with the announcement of the next chairman of the Federal Reserve. According to the New York Times, President Trump is expected to name Jerome Powell as the next chief according to two people familiar with the plans, the newspaper just published.
“The daily chart shows that the latest recovery was not enough to push spot above a series of major resistances, as the price keeps developing below its 20 and 100 DMAs, while also below the 23.6% retracement of the September/October slide”, said Valeria Bednarik, Chief Analyst at FXStreet. She points out that the Momentum indicator keeps heading south within negative territory as the RSI hovers around 44, indicating that the upward movement seems more corrective than a sign of further gains ahead.
Bednarik notes that in the 4 hours chart, technical indicators head marginally higher but within neutral territory whilst the price recovered above its 20 SMA, but remains below the larger ones, sharing the longer term outlook.