Gold price drops 0.30 percent on USD strength

New York (Oct 20)  Yesterday's solid rally from the low of $1276.57 to $1291 left a higher low on the daily chart. Only a break below $1276. 57 would signal a revival of the sell-off from Monday's high of $1306.

The data docket is light, hence the focus remains on the treasury yields and the US dollar. Both could remain well bid on Trump's tax reform plans. Escalation of tensions in Spain and/or Korean Peninsula may strengthen the demand for the yellow metal.

Gold Technical Levels

The metal was last seen trading around $1284 levels. A break below $1276.57 would open doors for a sell-off to $1266.38 (Oct 5 low) and $1264 (200-DMA). On the higher side, breach of hurdle at $1291 (10-DMA) would open up upside towards $1300 (psychological level) and $1303.50 (50-DMA).

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