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  • Gold continued gaining traction for the third consecutive session on Tuesday.
  • The set-up favours bullish traders and supports prospects for additional gains.
  • Sustained breakthrough an ascending trend-line will negate the bullish bias.

Gold scaled higher for the third consecutive session on Tuesday and built on its recent bounce from one-month lows, around the $1860 region touched last week.

Given that the recovery has been along a multi-day-old ascending trend-line support, a move back above the $1900 mark might have already shifted the near-term bias back in favour of bullish traders. Acceptance above 200-hour SMA further add credence to the constructive set-up and supports prospects for additional gains.

The positive outlook is further reinforced by the fact that technical indicators on hourly/daily charts have just started moving into the bullish territory. Hence, some follow-through strength towards testing the next major hurdle, around the $1910-12 region, looks a distinct possibility amid a broad-based USD weakness.

Some follow-through buying should pave the way for an extension of the momentum and trigger some technical buying. This, in turn, should assist bulls to aim back towards challenging the $1932-33 supply zone.

On the flip side, any meaningful pullback might continue to attract some dip-buying near the mentioned trend-line support, currently around the $1890 region. Failure to defend the mentioned support will negate the bullish bias and turn the XAU/USD vulnerable to slide further towards testing the $1868-67 horizontal support.

Gold 1-hourly chart


Technical levels to watch