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  • Gold ´s upside underpinned by fresh US dollar selling.
  • Focus shifts to FOMC decision amid a lack of fresh fundamentals.

Gold prices on Comex quickly reversed a dip below the   USD 1200 levels and now prints fresh two-day tops at 1206.20, as the US dollar came under renewed selling pressure.

The latest leg down in the greenback versus its main rivals can be mainly attributed a fresh seen in the EUR/USD pair after the ECB President Draghi delivered hawkish comments in his testimony. The USD index stalled its recovery near 94.20 levels and dropped sharply to fresh daily lows at 93.92.

However, it remains to be seen if the precious metal can maintain the upside, as the buoyant tone seen around the US Treasury yields remains intact heading into the FOMC interest rate decision.

In the meantime, the prices could continue to be influenced by the USD dynamics and risk trends, as China canceled trade talks with the US while speculators increased their net short position in COMEX gold contracts in the week to Sept. 18, the latest CFTC data showed on Friday.

Gold Technical Levels

Mohammed Isah at FXTechstrategy noted: “On the downside, support comes in at the 1,190.00 level where a break will turn attention to the 1,180.00 level. Further down, a cut through here will open the door for a move lower towards the 1,170.00 level. Below here if seen could trigger further downside pressure targeting the 1,160.00 level. Conversely, resistance resides at the 1,210.00 level where a break will aim at the 1,220.00 level. A turn above there will expose the 1,230.00 level. Further out,  resistance  stands at the 1,240.00 level. All in all,  GOLD  looks to weaken further towards its key support.”