Article by: ETO Markets

The US Dollar saw significant losses as the differences in monetary policy between the Fed, the BoE, and the ECB became more apparent. Falling jobless claims and an unexpected increase in US retail sales figures provided some relief for the greenback. However, the momentary respite for the US dollar proved fleeting, as the global risk-on rally driven by the dovish Fed outlook crushed it once more, maintaining the gold price close to eight-day highs of $2,048.

As long as gold prices hold the crucial short-term 20-DMA, currently around $…, the bullish potential for the metal looks intact. This is because the Relative Strength Index is still above the midline. If there is a prolonged decline below the latter, the 50-DMA support level at $… will once again be in play, opening doors for a test of the $… barrier.

Conversely, a daily close above the $… area is necessary to initiate further gold price recovery in the direction of the psychological $… level.