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  • Gold consolidates recent strong gains to fresh multi-year tops.
  • Slightly overbought conditions warrant some caution for bulls.

Gold now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading band near multi-year tops, around the $1720 region.

The commodity stalled the momentum near the top end of a two-week-old ascending trend-channel amid slightly overbought conditions on the 4-hourly chart.

Meanwhile, technical indicators on the daily chart have also moved closer to the overbought territory and warrant some caution amid a recovery in the global risk sentiment.

Hence, it will be prudent to wait for a sustained break through the mentioned hurdle before traders start positioning for any further near-term appreciating move.

Any meaningful pullback is likely to find some support near the $1703 region (previous multi-year tops set on March 9), which if broken might prompt some technical selling.

Below the said support, the commodity is likely to accelerate the slide further towards testing the $1674-72 region, which coincides with the trend channel support.

Gold 4-hourly chart

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Technical levels to watch