Gold extended upside movement on Wednesday, increasing the price of yellow metal to more than $1240 an ounce, following the release of some key economic news. The technical bias remains bearish because of a lower low in the recent downside move.

Technical Analysis

As of this writing, the yellow metal is being traded around $1243 an ounce. A hurdle can be noted near $1250.00, the psychological number ahead of  $1275, the trendline resistance zone and then  $1300, the psychological number as demonstrated in the given below daily chart.

On the downside, a support can be noted near $1200, the psychological number ahead of $1156, the horizontal support area and then $1133, the lower trendline support zone. The technical bias shall remain bearish as long as the $1337 resistance area is intact.

RBA Monetary Policy

THE Reserve Bank has left the official cash rate on hold at 1.5 per cent in its first meeting of 2017, and the majority of experts now believe the next move will be up. The RBA was widely expected to keep rates on hold at its February meeting after cutting rates twice last year, first in May to 1.75 per cent and then in August to its current historic low. The last time the official cash rate increased was November 2010.

Trade Idea

Considering the overall technical and fundamental outlook, buying the precious metal around current levels appears to be a good strategy in short to medium term.