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  • Gold has backed off from multi-month highs. 
  • Intraday technical charts favor a pullback to key SMA support. 

Gold is trading near $1,952 per ounce, having put in a near two-month high of $1,955 early Wednesday. 

The 4-hour chart shows a bearish divergence of the Relative Strength Index (RSI). The hourly chart RSI is also painting a similar picture. Meanwhile, the 14-day RSI is now reporting overbought conditions with an above-70 print for the first time since August. 

As such, the yellow metal could visit the ascending 5-day Simple Moving Average (SMA) support, currently located at $1,927.

The case for a pullback would strengthen if the US Republican party wins both seats or at least one in Georgia elections, retaining Senate’s control. That would weaken the case for a bigger fiscal stimulus. As such, the dollar, gold’s biggest nemesis, could bounce on Republican victory. The dollar index is currently seen at 89.52.

Gold’s broader trend would remain bullish as long as prices are trading above Monday’s low of $1,898. 

Hourly chart

Trend: Pullback likely

Technical levels