Gold defends 38.2% Fib retracement support

• Gold holds above $1260.44 (38.2% Fib R of Nov/Dec sell-off).
• Adds credence to bullish reversal confirmation.

Gold prices retreated from yesterday's 11-day high of $1264 but has defended the 38.2% Fib mentioned above.

The move higher seen yesterday added credence to the bullish reversal argument put forward in the price action post-Fed.

As of writing, the yellow metal is trading at $1272/Oz levels. Further gains could be on the cards as indicated by the bullish crossover between the 5-day MA and 10-day MA. That said, the US 10-year treasury yield has could rise above 2.4 percent in a convincing manner if the US housing data due today beat estimates by a wide margin.

The rising Treasury yield could put a bid under the US dollar and hurt the yellow metal. Also, the strong bid tone in the US stocks could keep the investors away from the zero-yielding gold.

Gold Technical Levels

A move above $1264 (previous day's high) could yield $1267.67 (50% Fib R of Nov/Dec sell-off) and $1271.28 (200-day MA). On the downside, breach of support at $1260.44 (38.2% Fib R of Nov/Dec sell-off) would expose support at $1257 (5-day MA) and $1251.10 (23.6% Fib R of Nov/Dec sell-off).