Gold keeps rising and climbs above $1340

Gold prices started to rally before the FOMC statement and then continued to move higher. Recently the yellow metal extended gains and climbed to $1343, the strongest level since September 8.

The price was hovering around $1340, showing so far a weekly gain of $30 supported by a decline of the US dollar in the currency market.  The latest rally in gold prices was not followed by another leg lower of the greenback in the market, signaling the strong momentum in the metal.

Major test coming?

Short-term technicals favor a continuation of the upside, particular if XAU/USD holds above $1340.  Below support levels might be seen at $1335 and $1335.

If gold keeps rising it would challenge an important downtrend line, coming from July highs that currently stands around $1345. That line capped the upside early in September. A consolidation on top of the mentioned trendline and also significantly on top of the $1350 zone, would strengthen the bullish case.