Gold climbs above $1,240, but holds bearish momentum

FXstreet.com (Córdoba) - The price of gold suffered an important decline on Tuesday, as it closed at $1,241, losing more than $10. Early on Asia opened steady and currently is hovering around $1,240.

Another run to test key support?

Momentum turned negative for gold on Tuesday after being unable to hold above $1,250 and accelerated to the downside once below $1,245. Price bottomed on Tuesday at $1,235 where a key short-term support level lies. During the American session, on the back of a weak US dollar, trimmed losses.

If downside momentum persists and the price falls once again below $1,240, another test to Tuesday's lows could be expected. The price zone around $1,235 is a strong support that capped the downside several times last week. If the price drops under $1,234.00 it would be trading at the lowest prince in ten days.

Australian CPI next: AUD/USD reaction

Australia's CPI numbers (QoQ/YoY) are due at 00.30GMT, with the Q4 CPI‘headline’ expected at +0.4% vs prior of +1.2%, while the y/y is expected at 2.4% vs prior 2.2%. As to the ‘trimmed mean’ (measure the RBA focus the most), bearing in mind the RBA sets the ‘core’ inflation in a target band of 2% to 2.5%, the QoQ expected is at 0.6% vs prior of 0.7%, with the YoY expected at 2.3% vs unchanged prior of 2.3%.
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