Gold spot (XAU/USD) reaches near short term hurdle

Since early 2016, the gold prices are trading in a broad range. This kind of consolidation repetitively gives buying opportunity at the support level and profit booking or selling opportunity at the resistance levels, until it breaks out from the price range. 

However, at present prices, gold has reached near short-term resistance US$1,287 which is 61.8 per cent Fibonacci retracement level of recent down move started from the high of April 2018 to the low of August 2018. The indicators and oscillators on daily time frame reached near overbought zone while there is negative divergence is developing in Stochastic indicator. 

A follow-through move above the resistance level US$1,287 would lead to an extension of the pull-back toward US$1,300, followed by US$1,320. While on the downside, the crucial short-term moving average, i.e. 21-Day Exponential moving average is likely to act as immediate support which is currently placed at US$1,258.57, failure to hold this support would lead to further correction up to the level of US$1,232.