Gold prices traded lower on Monday morning on stronger U.S. dollar. Gold prices eased from near-four-month highs amid dollar strength as investors were hopeful on the pace of US monetary policy tightening despite mixed signals from Fed officials.
Atlanta Fed President Raphael Bostic said Monday while he supported the Federal Reserve “slow removal” of monetary policy accommodation, the central bank may not need to raise rates three or four times per year.
Despite the prospect of global monetary tightening from the Federal Reserve, Bank of England and Bank of Canada this year, BofA Merrill Lynch said it expects gold prices to rise to $1,350 an ounce by the third quarter of the year.
Gold daily chart formed “Rising wedge” pattern. The last session seems consolidated near the channel’s support line but bearish in trend inside the channel. As per the technical aspects of the pattern, the market is expected to retest the level and rally on bullish once again. The upside rally could test $1325-1330(29420-29545) levels in upcoming sessions. Alternatively, if market breaks below the support slope line then it might continue in bearish momentum. Major resistance holds at $1330(29545) and previous resistance become support at $1300(28795). RSI reading overbought near 71 points.
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