- Gold edged lower on the first day of a new trading week amid the upbeat market mood.
- The downtick lacked any strong follow-through and the metal held above $1722 support.
- Mixed oscillators warrant some caution before placing any aggressive directional bets.
Gold traded with a mild negative bias through the mid-European session amid the prevalent risk-on mood, albeit has managed to defend the $1722 horizontal support.
Looking at the broader picture, the recent move up has been along a two-month-old upward sloping channel. This coupled with the fact that technical indicators on the daily chart are holding in the bullish territory supports prospects for a further near-term appreciating move.
However, oscillators on hourly charts have been struggling to gain any meaningful traction. The set-up – though seems tilted in favour of bullish traders – warrants some caution before positioning aggressively for any meaningful appreciating move amid stronger USD.
Meanwhile, a convincing break below the mentioned support might prompt some aggressive technical selling and turn the commodity vulnerable to accelerate the fall further towards challenging the trend-channel support, currently near the $1710 region.
On the flip side, Friday’s swing high, around the $1740 level, now seems to act as immediate resistance and is followed by the $1755 level. Above the mentioned barrier, the commodity is likely to aim back to retest multi-year tops, around the $1765 region.
The momentum could further get extended and lift the yellow metal further towards the top end of the trend-channel, currently near the $1775-76 region, en-route the $1800 round-figure mark.
Gold 4-hourly chart
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Technical levels to watch
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