Gold weekly
Gold is on an uptrend since November but a crucial resistance is yet to be broken.IBTimes UK/FXStreet

Gold has been higher in the early days of the new year but is still way behind the resistance barrier which needs to be broken to strengthen the case for a reversal of last year's downtrend.

The yellow metal has risen more than 5% so far in January adding to the 1.5% gain in December and taking further off the 4-1/2-year low of $1131 touched in November.

That the dollar too has risen over the same period weighing on other commodities like crude oil shows that the yellow metal has its own demand most likely of safe haven nature.

The USD index has made a 2.5% jump this month to hit a 12-year high continuing the monthly rise since July last year.

While upbeat US data is increasing speculation that the Federal Reserve is on track to start hiking interest rates in the coming months, most major economies are fighting disinflation or deflation, creating room for safe haven investments.

If that fundamental factor continues to support the yellow metal, then hitting lows like $1100 and $1000 will be delayed.

As of now, gold has its first upside target at $1255 and then $1268, a break above which will weaken the downward channel since early 2014. But $1300 needs to be broken to confirm the beginning of an uptrend.

On the downside, the metal has its first level of importance at $1180 and then $1131, the last year low.