The yellow metal GOLD soared to a near six-month high in the previous session, as investors neglected risky assets like stock markets. Meanwhile, the dollar also remained under pressure due to a weaker outlook towards the US interest rates and the economy.

Weaker Dollar Index & Stronger Gold

Fellas, the dollar index got weaker after the Federal Reserve signaled fewer interest rate hikes over the next two years and expressed caution about the US economic outlook.

In response, the market sentiment shifted from Risk-on to Risk-off and investors started moving their investments from riskier investments to safe and low premium investments such as Gold, Silver, and Japanese Yen.

Speaking of technicals, the precious metal is likely to face resistance at $1,265. As of now, gold prices have already reached below $1,262 to hit our take profit.

Looking at the Stochastic RSI, the gold is massively overbought at $1,262, but on the hourly timeframe, it has formed a shooting star which is emphasizing that bulls are getting weaker so bears may gain control.

Gold Trading Plan

As per the above analysis, I will be looking to open another position below $1,265 with a stop above $1,269 and take profit at $1,258. Be careful fellas, we also have a series of fundamentals which can impact gold prices, especially the GDP data from the United States.

Good luck!