Gold rebounds and again approaches $1340

• XAU/USD rebounds sharply after a brief dip to $1331.
• Ounce moved toward $1340 amid a USD sell-off.

The yellow metal rebounded after hitting $1,331/oz and jumped to $1,339.10 reaching a fresh 5-day high. Near the end of the session, it was hovering around $1,337 up $5 from yesterday’s close.

The move higher during the American session was boosted by broad dollar weakness. The US Dollar Index (spot) dropped to 90.05, the lowest level since December 2014. The greenback then moved modestly off lows across the board but still was the worst performer of the US session.

Gold continued to struggle near the $1,340 area. The undertone continues to favor the upside and it is about to post the third daily gain in-a-row. Still remains unable to erase last Wednesday’s losses when it plummeted from above $1,342 to $1,325.

Technical levels

The trend point to the upside but the rally failed above $1,340 last week. The area around $1,340/45 is the level to break in order to clear the way to more gains. The next resistance might be seen at $1,350 followed by $1,357 (Sept high). On the flip side, support lies at $1,332 (short-term uptrend), $1,324 (last week low) and $1,315.