Gold prices have tried couple of times to break the upward resistance at $1250 but it failed in doing so. Lets take a look at the Gold prices from July last year. In 2016 Brexit provided an opportunity for Gold bulls. Gold has posted the high of $1374. After that it has dropped significantly due to comparatively good data from US side and two rate hikes in between this period. After the US election Gold posted the low of $1124. But the bulls did not lost the hope. From time to time we see a good investment in gold due to its safe heaven properties.
Lets take a technical look at gold prices. Now gold is trading just below the 50 percent retracement ($1250) of $1374, there is a strong resistance around $1262. If we look at the chart of gold, we can find a trend line and Gold is still trading below this line. Until the prices break this trend line, Gold will still be in Bearish mode and the first target will be $1205 and then $1180. Stochastic RSI is showing comparatively oversold but the True strength indicator is showing some more room for price to go above $1260.
The Trumpflation and the political uncertainties from Europe can boost the prices of Gold. But there should be one thing in mind that we can see more rate hikes from FED because FED has indicated the three rate hikes in 2017.
It could be negative for Gold.
So, on a technical basis we should remain bearish in gold until it break the $1265. there should be sell on every spike. And Fundamentally the end of Trump dollar rally can move the prices of Gold higher.
