Gold rallies for a fifth day in a row, with prices jumped above $1,335, touching a 3.5-month high on Wednesday. The ascent accelerated after a break above the 100-DMA and the $1,300 psychological resistance. Now, the bullion can target the $1,340 handle.
The main driver behind the ongoing rally in the precious metal is a weaker dollar. The greenback faced selling pressure nearly across the board against the backdrop of a more dovish tone from the Federal Reserve officials. In particular, following Bullard’s hints at a rate cut on Monday, the Fed’s Powell said that the central bank will respond “as appropriate” to the risks posed by a global trade war and other recent developments.
From the technical point of view, the gold bulls still have the overall advantage in the short term. On the other hand, failure to see a daily close above $1,335 could attract some profit-taking as the major upside barrier at $1,340 could deter the buyers as risk sentiment improves across the financial markets.