Gold corrects lower still above $1,300

Gold dropped for the second day in a row on the back of a stronger US dollar across the board. The yellow metal was able to hold at all times above $1,300 and bottomed at $1,306. It is about to end the day slightly above the lows, down 1.40% from Tuesday’s high. 

Earlier today the upside appeared to gain some momentum but upbeat US economic data gave more fuel to the greenback and gold, dropped back under $1,310. The correction from yesterday’s peak at $1,326 seems limited as long as gold holds firm above $1,300. Today the area around $1,305 limited the downside, despite the strong economic numbers and the USD rally. 

Technical outlook 

From a technical perspective, the near-term outlook remains bullish after the breakout of the $1,300 threshold says Valeria Bednarik, Chief Analyst at FXStreet. According to her technical readings in the daily chart confirming the upside bias, as technical indicators have lost directional strength after correcting overbought conditions, steady well above their mid-lines.

“In the 4 hours chart, the price is struggling around a bullish 20 SMA, so far holding above it, while technical indicators have retreated further within positive territory, with the RSI indicator currently at 53, a suggesting the commodity may correct further, particularly on a break below 1,304.96, the weekly low”, concluded Bednarik.