Gold made a surprising move towards the upside. In Thursday’s trade prices took the 21DEMA support at the level of $1,231. In the daily charts, prices gave a fresh breakout of the 6-month trading pattern. Oscillators are showing an extremely overbought position. Traders eye Wednesday’s Fed monthly meeting. The equity market tumbles on China fears. The People’s bank of China has halted bank cash transfers ahead of the upcoming New Year’s holiday sparked fears of a nation-wide liquid crunch. A large sell-off in the financial market makes optimism towards gold. Probably, asset shipment should happen. In our last week’s report we alerted about the asset shipment. Yellow metal trading near the crucial resistance level $1,294.

In the hourly chart, we observe negative divergence on RSI. We recommend selling on rallies, prices will come down until a break and close above the level of $1,294.

Support: $1,266, $1,261.