- Gold edged higher for the third consecutive session and shot to one-week tops on Wednesday.
- The momentum lifted the commodity beyond the $1720-22 hurdle, albeit lacked follow-through.
- Bulls now look forward to the latest FOMC monetary policy update for a fresh directional impetus.
Gold built on its steady intraday positive move and climbed to one-week tops, around the $1725 region after softer-than-expected US CPI figures.
The uptick marked the third consecutive day of a positive move and lifted the commodity beyond the $1720-22 resistance zone. This coupled with the fact that technical indicators on the daily chart have just started gaining positive traction suggests a near-term bullish breakout.
However, investors seemed reluctant to place any aggressive bullish bets, rather preferred to wait on the sidelines ahead of the FOMC policy decision. Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further appreciating move.
Nevertheless, bulls might now aim to test an intermediate resistance near the $1642-45 region, above which the momentum could further get extended back towards multi-year tops, around the $1665 level.
On the flip side, immediate support is pegged near the $1715-14 horizontal level, which if broken might accelerate the slide back towards the $1700 mark. Failure to defend the mentioned support levels might negate the constructive outlook and prompt some aggressive technical selling.
The commodity might then turn vulnerable to slide further towards the $1685 support area before eventually dropping to the recent swing lows, around the $1670 level. The next support is pegged near the $1660 level, which should act as a strong base for the commodity.
Gold 4-hourly chart
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Technical levels to watch
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