- Gold attracts some dip-buying near the $1770 confluence support.
- The set-up favours bulls and supports prospects for additional gains.
- A sustained move beyond $1780 level will reinforce the bullish bias.
Gold reversed an early dip to the $1770 area and turned positive for the day, albeit lacked any strong follow-through and remained below the $1780 horizontal resistance. The emergence of some intraday buying reinforced a confluence support comprising of 200-hour SMA and one-month-old ascending trend-line support, which should act as a key pivotal point for short-term traders.
Meanwhile, technical indicators on the daily chart maintained their bullish bias and have against started gaining some positive traction on hourly charts. This, in turn, supports prospects for additional gains. However, the prevalent risk-on environment held investors from placing any aggressive bullish bets and seemed to be the only factor capping any strong gains for the safe-haven precious metal, at least for the time being.
Hence, it will be prudent to wait for some follow-through strength beyond the $1780 level before positioning for any further appreciating move. The commodity might then aim to test the ambitious $1800/ounce target.
Conversely, a convincing breakthrough the mentioned confluence support near the $1770 region will negate the constructive outlook and accelerate the slide back towards last week’s swing low, around the $1758-57 region. The corrective slide could further get extended towards intermediate support near the $1750 horizontal level before the commodity eventually drops to test a previous strong resistance near the $1742-40 zone.
Gold 1-hourly chart
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Technical levels to watch
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