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Gold retreats after being unable to break above $1250

  • Gold off highs amid a recovery of the US dollar and despite a negative in tone in Wall Street. 
  • Price tested the $1250/oz area but again failed to break higher. 

Gold is trading at $1,247/oz, practically flat for the day. Hours ago reached the highest level in a week at $1,250.20. The area around the critical $1,250 level capped the upside and price retreated. It found support at $1,245. 

The move away from the highs took place amid a recovery of the greenback across the board. The dollar remains in negative territory against most of its rivals but trimmed losses significantly. 

The Federal Reserve started today it's 2-day meeting. A 25 bp rate hike is expected to be announced tomorrow. However, attention will likely focus on the FOMC projections that could have a significant influence on the US dollar. 

XAU/USD Levels to watch 

To the upside, if gold rises and holds on top fo $1,250 it could point to further gains. The next resistance levels might lie at $1,254 and $1,261. On the flip side, supports could be seen at  $1,244 (daily low), $1,240 and $1,235 (20-day moving average).

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