Gold rises sharply, approaches monthly highs

Spot gold rallied to a fresh weekly high of $ 1,269.57 and settled nearby by the end of the day as the dollar fell sharply after the Fed and the BoJ, both held fire on economic policies. The first brought some relief to gold bulls, who usually become reluctant on prospects of a rate hike, while the second sparked a sell-off in worldwide equities and US futures.

Gold technical outlook

“The bright metal is beginning to look more constructive towards the upside, as in the daily chart, the price is finally detaching from its 20 SMA now turning higher around 1,241.80, whilst the technical indicators are advancing above their mid-lines, particularly the RSI that heads north around 61,” said Valeria Bednarik, chief analyst at FXStreet. “Shorter term, the 4 hours chart shows that the price is now well above its moving averages, with the 20 SMA advancing modestly above the 100 and 200 SMAs, and the technical indicators beginning to lose upward strength within overbought territory. Nevertheless, and as the price remains near the daily high, the risk remains towards the upside, with scope to extend its rally up to 1,283.50 the high set on March 11th.”

Support levels: 1,261.40 1,252.80 1,242.30. Resistance levels: 1,271.80 1,283.50 1,290.90.