Gold: Bearish outside-day makes today's close pivotal

• Gold charted a bearish outside-day yesterday on hawkish Fed rate hike.
• A bearish reversal would be confirmed if prices close today below $1,241.

Gold came under pressure on Wednesday after the hawkish Fed rate hike put a strong bid under the greenback.

The yellow metal, which hit a five-month high of $1,258 in the run-up to the FOMC rate decision, fell back to $1,241 after the US central bank signaled it could raise rates two times in 2019, as opposed to the market expectation that rate hikes will be paused in 2019.

Essentially, the Fed left markets behind the curve. The dollar index, therefore, bounced off from the 50-day MA of 96.55 and jumped to a high of 97.10. As a result, gold ran into offers and ended up creating a bearish outside-day candle.

The candlestick pattern indicates that the day began with optimism and ended on a pessimistic note. Hence, it is widely considered an early sign of bearish reversal. That, however, would be confirmed only if the metal ends below $1,241 (yesterday's low) today.

As of writing, the safe haven yellow metal is gently bid at $1,245, possibly due to the slight pullback in the dollar index from the overnight high of 97.10.

Gold Technical Levels