Gold: 20-day MA is a tough nut to crack

• The 20-day moving average (MA) continues to cap upside in the yellow metal.
• A key descending trendline has been breached.

Gold (XAU/USD) failed to take out the descending (bearish) 20-day MA yesterday and was last seen trading largely unchanged on the day at $1,297.

The moving average has played a spoilsport since mid-May and proved a tough nut to crack even during the last week's Italy-led risk aversion in the financial markets.

However, the yellow metal breached the falling trendline (drawn from the April 11 high and May 11 high) yesterday, so a convincing break above the 20-day MA could be on the cards. Currently, the moving average is located at $1,300.

The action in the related markets - USD, treasuries, and equities, seem to have little or no influence on the yellow metal, so focus is on the technical factors mentioned above.  

Gold Technical Levels

Resistance: $1,300 (20-day MA), $1,308 (200-day MA), $1,325 (May 11 high).

Support: $1,288 (June 1 low), $1,282 (May 21 low), $1,260 (Oct. 6 low).