- Reviving safe-haven demand helped regain some traction on Wednesday.
- Any subsequent recovery move might still be seen as a selling opportunity.
Having found some support near 38.2% Fibonacci level of the $1265-$1557 bullish move in the previous session, gold managed to gain some follow-through traction on Wednesday.
Renewed US-China trade pessimism benefitted traditional safe-haven assets and prompted some short-covering move around amid slightly oversold conditions on the 4-hourly chart.
Given the recent break below a one-month-old trading range support, which coincided with 100-day SMA, the near-term technical set-up remains tilted in favour of bearish traders.
Moreover, oscillators on the daily chart maintained their bearish bias and warrant some caution before positioning for any further recovery ahead of the Fed Chair Jerome Powell’s testimony.
Hence, any subsequent recovery might still be seen as an opportunity to initiate fresh bearish positions near the confluence support breakpoint, now turned resistance near the $1475 region.
Meanwhile, bears are likely to wait for a sustained break through the $1450 support area (38.2% Fibo.), below which the commodity is likely to accelerate the fall towards $1425 intermediate support.
Some follow-through selling has the potential to continue dragging the yellow metal further towards its next major support, marked by 50% Fibo. level, around the $1412-10 region.
Gold daily chart
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