The gold halted its recent rising trend, and showed a slight correction from the highs of seven weeks reached near the region from 1271 usd, which it touched during the asian session today.
The escalation of geopolitical tensions, after North Korea carried out another test intercontinental ballistic missile on Friday, drove demand for safe-haven , and elevated the precious metal to its highest level since June 14.
However, a moderate recovery of the us dollar, with the dollar index bouncing off lows of several months, and limited any new rise of raw materials denominated in dollars, like gold. In addition to this, the operators also seemed inclined to take some profits, especially after three consecutive weeks of gains and the gains of over 1% recorded in the previous week.
In a broader picture, the reverse current could be seen as a buying opportunity in the midst of increasing political turmoil in the world’s largest economy and a decrease of the expectations of any additional hike of rates by the Fed in 2017, which could continue supporting unprofitable products.
The weakness below the level of 1265 dollars might extend down to a horizontal support in 1260-59, below which the metal seems vulnerable to re-test the very important support of the SMA of 200 days near the region of 1250.
On the other hand, the sustained boost over the area of 1270 now seems to open space for the continuation of the upward trajectory in the short term towards the area 1279-80, putting the gold in route to 1285.