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Gold edges higher after BOJ leaves rates unchanged

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Gold edges higher after BOJ leaves rates unchanged

Gold prices held steady, and were able to gain some ground on Thursday as the Bank of Japan kept interest rates unchanged, keeping the dollar subdued and interest rates stable.  Gold prices bounced back through the 1,300 level, after falling through the psychological benchmark on Wednesday.

Gold prices recovered some of their recent losses on Thursday as traders used technical support levels to move back into long positions in the yellow metal.  Gold interest rates declined relative to US interest rates allowing traders to borrow gold and hold deferred positions more inexpensively.

Gold prices were unable to make a lower low on Thursday and rebounded testing resistance near the 10-day moving average at 1,311.  A close above this area would likely lead to a test of resistance near the July high at 1,345.  Support on the yellow metal is seen near the recent lows at 1,270.  A break of this level would lead to a test of support near 1,210.  The downward trajectory of the 10-day moving average shows that a short term negative trend is in place.

Momentum on gold prices has slowed to a crawl.  The MACD (moving average convergence divergence index) is printing near the zero index level, as the spread (the 12-day moving average minus the 26-day moving average) is printing at the same level as the 9-day moving average of the spread.

The RSI (relative strength index) which is an oscillator that measures overbought and oversold levels has moved higher with price action and is printing near 50 which is in the middle of the neutral range.  RSI readings above 70 are considered overbought while levels below 30 are considered oversold.

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