Gold prices dipped lower on Wednesday for the third consecutive day as the dollar moved higher after strong CPI data and the Congress decision to start working on tax reform package.
Saxo Bank’s head of commodity research Ole Hansen said: “Geopolitical trouble hasn’t disappeared and the U.S. political landscape is still fraught with difficulties”. Ole added: “When gold drops almost $40, a lot of investors see that as a good level at which to buy back in.”
Gold prices have retraced but were unable to hold above the support line. Failing to close, on the daily chart, below the support line at $1330, it has formed “Rising Wedge Pattern”.
Currently, prices trade below the support line, which indicates a bearish momentum. Support holds at $1300, a break below could lead towards $1318-1300 level. On the other hand, if prices fail to break below, then the next upside rally would be towards $1362-1400. The RSI indicator reduced from 76% to 59%.