Gold posts highest close since September 2016 above $1330

Gold finished higher on Monday support by risk aversion. Safe-haven assets, including the yellow metal, rose supported by the new tests from North Korea. The ounce reached $1,339 during European hours, the highest level since September of last year and then pulled back. 

The retreat from levels near $1,340 found support at $1,331. It ended at $1,333 the third daily rise in a row, accumulating a gain of more than 2%. Price action remained limited during the last hours amid a holiday in the US. 

Technical outlook 

“The daily chart for gold shows that technical indicators consolidate within overbought territory, while the price remains far above moving averages, in line with the dominant bullish trend but also giving the first signs of warning over a possible downward corrective movement around the corner,” said Valeria Bednarik, Chief Analyst at FXStreet.

According to her, in the 4 hours chart, the 20 SMA accelerated north far below the current level, while technical indicators retreated from overbought territory, and particularly with the Momentum accelerating south towards their mid-lines, “also indicating that a downward corrective movement is possible during the upcoming sessions, but keeping the dominant bullish trend alive.”