GOLD prices were steady below $1,240 as the dollar edged up, while palladium plunged from record highs reached in the previous session. The commodities are highly correlated with each other, which is why gold is also feeling a bearish pressure.

Secondly, the dollar is gaining momentum on the back of four rate hikes in 2018. For all the freshers, there’s a strong negative correlation between dollar and gold, which is why strength in the Greenback drives bears for the bullion.

On Wednesday, gold violated a strong resistance level of $1,234 and managed to close candles above this level. For now, gold is facing support at the same level. Besides that, the 20 and 50 periods EMA are extending a solid support near $1,227 which is far away from the CMP (current market price). It means that we can expect a correction in gold prices.

Support Resistance
1234.02 1239.77
1230.83 1242.33
1225.08 1248.08
Key Trading Level: 1236.58

Gold – XAU/USD – Trade Idea
Gold has a very strong support near $1.234 today. I will be looking to stay bullish above $1,234 to target $1,240, while selling will be preferred below $1,234.

Good luck and stay tuned for more updates!