It should be noted that the market is cyclical and the price can not move in one direction without correction for a long period of time. With its five-day decline, gold showed that investors have made large-scale adjustments to their positions and fund relocation taking into account changes in the Fed monetary policy. This may mean that now traders will gradually switch attention from USD dollar and the Fed's actions to other factors, including geopolitics, equity markets and the demand for defense assets.
Now this will not bring global change in the market sentiment, but it can cause the development of a strong correctional movement. The dollar index showed its weakness when trying to continue growth to new yearly highs. Therefore, in the coming session we can see the development of a significant corrective retracement, since the main negative factors affecting gold are already included in the price.
On Thursday, the price of gold reached new lows in 2018, closing the fifth day in a row in the red zone. Influencing factors are the same, the pressure of the dollar and plans for more rate-hike from 3 to 4.
On the chart, there are also signs for the correction. First, the price showed a strong rebound from the support level of 1263.50. Such market action may be the beginning of the bull wave with a target at 1284.00. However technical indicators remain on the side of sellers so far, but if bulls manage to keep the price above 1263.50,we can see changes in the market sentiment. Besides much will depended on USD dollar.