Gold is trading in the red as the US dollar has resumed its short term rally. The greenback is trading at $1.720 level. It incurred minor losses after failing to rise higher. Still, the outlook for the US dollar is bullish despite the current minor drop.

Demand for gold has dropped after USDX's rally. However, it is unlikely to decline deeper. USD further increase versus its rivals could force the gold price to decrease in the short term.

Gold price has failed to reach the $1.745 high. Now it is trying to test the upper median line (UML) of the descending pitchfork and the weekly Pivot Point ($1.717) level. A further increase towards fresh new high will be confirmed only after a valid breakout above the $1.754 static resistance.

The price could slip lower if it closes and fixes below the PP ($1.717) level and below the upper median line (UML). Nevertheless, this potential drop will not necessarily confirm a larger corrective phase.

• GOLD Trading Tips

The gold price further growth will be confirmed only after a valid breakout above the $1.754 level. So, this scenario will bring a great buying opportunity. The next upside targets are seen at $1.785 and at $1.800, and higher at $1.825.

Gold could fall to the $1.700 - $1.693 area if the price consolidates below the PP ($1.717) level. The $1.700 - $1.666 area represents a very strong support area. Only a valid breakdown below the $1.666 level will indicate a larger drop, corrective phase.