- Gold attracts some dip-buying near a short-term ascending trend-line support.
- The technical set-up warrants some caution before placing any directional bets.
Gold has managed to recover a major part of the early lost ground to the $1712 area and has now moved well within the striking distance of daily tops. The precious metal attracted some dip-buying near ascending trend-line support extending from the $1670 support area, or monthly lows.
Meanwhile, technical indicators on hourly/daily charts are holding in the neutral territory and haven’t been supportive of any firm near-term direction. This, in turn, makes it prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move.
Any subsequent positive move is likely to confront some resistance near the $1730 horizontal level, above which bulls are likely to aim towards challenging the $1740-45 heavy supply zone. A convincing breakthrough will set the stage for a move to retest multi-year tops, around the $1765 region.
On the flip side, the commodity might continue to find some support near the mentioned trend-line support, around the $1712-10 region, which if broken might be seen as a key trigger for bearish traders. The momentum might then drag the commodity towards the $1700 psychological mark.
Some follow-through selling might turn the commodity vulnerable to accelerate the fall back towards the $1670 horizontal zone, with some intermediate support near the $1685-80 region.
Gold 1-hourly chart
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Technical levels to watch
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