Gold rebounds back to $1240, still heads for weekly loss

• Gold off lows amid a weaker US dollar and despite a negative in tone in Wall Street. 
• Bearish pressure eases but the short-term trend still points to the downside. 

Gold rebounded sharply and trimmed most of the day’s losses during the US session. The yellow metal bottomed at $1,232.90, the lowest since December 4. From the lows climbed back to the $1,240 area as equity prices in Wall Street extended losses. 

From the level it had a week ago, gold is around $10 lower, but the tone has changed significantly. Seven days ago, XAU/USD posted the highest weekly close since June, but it was rejected from above $1,250 and started to correct lower. 

Today bottomed near $1,230. The short-term outlook continues to favor a correction while the price remains under $1,245. Still, the main trend is bullish. 

XAU/USD Levels to watch 

To the downside, support levels are seen at $1,232.40 (20-day moving average), $1,228.90 and $1,218.20. On the upside, resistance could be located at $1,241.70, $1,247.00 and $1,251.20 (weekly high).