Gold is firmer in the short-term and prices are currently pivoting around the key 1290 level. On the 4-hour chart, the market turned more bullish after the crossover of the 50 and 200-period moving averages. RSI has risen above 50 which keeps the near-term bullish momentum intact.
The strong upleg above the 200-MA on November 22 has improved the bullish undertone. But strong resistance is expected in the zone between 1299.94 (November 17 high) and 1297.44 (38.2% Fibonacci of the downleg from 1357.47 to 1260.59). A daily close above the latter would strengthen bullish momentum to target the key 1300 psychological level. This is a critical level which if broken to the upside would open the way to the next high at 1306.05 and then at 1308.93 (50% Fibonacci).
Focusing on the shorter term, if gold fails to stay above 1290 then there is scope to dip towards 1283.28 (23.6% Fibonacci). Below this, the 200-MA at 1281.83 comes into view. The market needs to stay above it otherwise the current bullish momentum would weaken. Another leg lower would find support at 1274.42 and 1269.86 but further declines would increase the odds of breaking below 1260.59 to see a resumption of the downtrend from 1357.47 and shift the market out of its medium-term neutral phase.
