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Safe Haven Gold Again in Demand, Gains Still Capped

Gold continues to rise today as the demand for safe haven increased due to concern over global economic outlook. Another factor which have supported the Gold now is the timing of interest rate hike in U.S. as investors dampened the expectations for an early rate hike after Fed showed concern on global growth and U.S. inflation because of the stronger dollar. 

XAUUSD : 4 Hour Chart

On the 4 hour chart, we can see that the commodity is now following a rising channel trend and currently testing the support from the rising support trend line. The moving averages pattern is changing a little as 50 day SMA is now seems to be contracting towards the 100 day SMA and might cross above it signaling an uptrend continuation. The key resistance it have to face now is 1237.63 which prevented it in rising earlier. Breaking above this resistance will leave the pair break above the 200 day SMA as well giving a bullish outlook. The commodity might rise until it find resistance from the resistance trend line of the channel.

XAUUSD : Daily Chart

On the daily chart, Gold tried to break out from the previous resistance at 1235.09 but again declined back. If it is able to hold gains above this resistance trend line, the commodity might pause its rally again near the resistance at 1240.73 which earlier acted as support and then at 1257.65. On the other hand the pattern of the moving averages on the chart are still signaling a downtrend continuation. There is a falling support trend line which will prevent the commodity in rising further and therefore the gains in Gold still seems capped.