Gold soars and rises to $1220

• XAU/USD rebounds sharply from 1-year lows on the back of a decline of the US Dollar across the board.
• DXY is down for the day, ending a 3-day winning streak.

Gold bottomed earlier today at $1,204/oz, the lowest intraday level since March 2017. Price bounced and then accelerated to the upside after the US employment report. Recently peaked at $1,219.90.

As of writing XAU/USD was hovering near the highs, consolidating strong daily gains but still under yesterday’s highs. The rally of gold took place near a key psychological area ($1,200). The US Dollar slide boosted further the upside. The DXY peaked earlier today at 95.37, the highest since July 19 but then turned lower, falling to the 95.00 area. US data failed to boost the greenback that weakened amid a rally in Wall Street and lower US yields.

XAU/USD: a bottom in place?

The sharp recovery could signal that gold bottomed at $1,204. It is still too soon but the reversal is proven to be significant so far. The recovery so far was capped by $1,220. If it breaks above, it would open the doors to more gains. Resistance levels on top might lie at $1,225 and $1,229. On the flip side, a decline back under $1,215 could remove the positive short-term momentum. While under $1,210 a test of $1,204 and the $1,200 area seems likely.

The main trend continues to point to the downside but the area around $1,200/05 has become a strong support. A recovery above $1,230 could point to a change in the bias.