Short Covering but No Change in Gold Trend

July 20, 2018 9:06AM CDT

Gold is coming off a yearly low yesterday but managed to reject the washout to the key 1200 psychological level as the U.S. dollar rose to a yearly high. The precious metal has sold off 11 percent from its April high with soft physical demand as well as trade tensions and rising interest rates continuing to make the dollar surge. Gold has not garnered support from any safe haven demand as the downward bias in the precious metal remains down. However, if the dollar were to come off due to positive trade developments or a slowdown in interest rate hikes may cause the precious metal to turn. Momentum is trending lower but is coming off oversold levels with near-term resistance seen at 1232 and 1240 and support at 1213.

Gold Aug '18 Daily Chart

Gold Aug '18 Daily Chart

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