Gold - Off 1-month highs, but the bullish Bollinger band breakout confirmed

• Gold has backed-off from the one-month high.
• Still, outlook bullish as suggested by the bullish Bollinger band breakout.

Gold moved lower from Friday's one-month high of $1296.98 in Asia as the dollar index gained 3 percent.

Bullish Bollinger band breakout

As discussed on Friday, the gap between the Bollinger bands was the lowest in at least 4 years. As expected, the squeeze has ended with an upside break. Consequently, the doors are open for a move above $1300 levels.

However, the German political uncertainty and the resulting drop in the EUR/USD pushed the dollar index higher. That seems to have pushed gold down to $1292 levels.

That said, the upside still remains open as indicated by the bullish technical breakout and the continued flattening of the yield curve (USD bearish). Also, safe-haven demand for the metal would rise if the European equities respond negatively to the German political chaos.

Gold Technical Levels

As of writing, gold is at $1291.60. A break above $1300 (psychological level) would open up upside towards $1306.05 (Oct. 16 low) and $1313.65 (Sep. 26 high). On the lower side, breach of support at $1288 (Nov. 9 high) could yield a pullback to $1278 (Friday's low) and $1275 (Nov. 16 low).