- Gold regained traction on Friday and recovered a part of the previous day’s losses.
- The technical set-up supports prospects for a move to the $1931-33 supply zone.
- Sustained weakness back below the $1900 mark will negate the positive outlook.
Gold edged higher through the early North American session and refreshed daily tops, around the $1912 region in the last hour, recovering a part of the overnight slide to over one-week lows. Given that the precious metal showed some resilience below the $1900 mark, or support marked by a two-week-old ascending trend-line, the emergence of some fresh buying favours bullish traders.
The outlook is further reinforced by the fact that technical on hourly charts have again started moving in the positive territory. Moreover, oscillators on the daily chart – though have been correcting from higher levels – maintained their bullish bias. Hence, a subsequent move to the $1918 intermediate resistance, en-route the $1931-33 supply zone, looks a distinct possibility.
On the flip side, any meaningful pullback might continue to attract some dip-buying near the $1900 mark. This, in turn, should help limit the downside near the overnight swing low, around the $1895 region. That said, some follow-through selling will shift the bias back in favour of bearish traders and prompt some technical selling, paving the way for additional near-term weakness.
The XAU/USD might then turn vulnerable to accelerate the slide towards 100-day SMA support, around the $1880 region. The downward trajectory could further get extended towards the $1960-59 intermediate horizontal support en-route September monthly swing lows, around the $1849-48 region.
XAU/USD 4-hourly chart
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Technical levels to watch
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