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Gold (XAU/USD) has convincingly traded above its 200-day moving average (DMA) at $1843. Technically, a move over interim $1922 resistance would target the $1950-$1967 price layer which should offer sturdy resistance, Benjamin Wong, Strategist at DBS Bank, reports.

See:  Gold Price Analysis: XAU/USD has steam to surge above the $2072 2020 high – Commerzbank

Bulls yet to see the finish line

“Gold bulls continue to flex their muscle, and gold price continues its upward trajectory with a successful break of the key 200-DMA at $1843. A key factor behind gold’s resurgence is that US real rates have started to slope lower as Federal Reserve officials reiterate their dovish commitment, pulling USD back towards January lows. As a non-interest-bearing asset, such a development positively underpins gold prices.”

“Gold’s rally is consistent with our warning in early March that the prior April-June 2020 price congestion zone in the $1660-$1670 zone will spawn a bullish price reversal. Technically, the rally has been supported by a bullish $1676 double bottom, prodded further by a bullish inverse head-and-shoulders bottom on the shorter time frame four-hourly chart.”

“XAU/USD’s rally of late is not exactly a fresh phenomenon as the bull quietly came back to the ring in late March – this implies that speculative buying is once again entering longs at poorer levels. Taking the impulse leg down to the $1676 double bottom, a fully bloomed 1.618% price extension calibrates at $1950 – so we are expecting the $1950-$1967 price layer to offer some sturdy resistance. Until then, there is a fair chance bulls have yet to see the finish line.”

“Gold’s rally up is intact unless gold returns lower under $1834, which would be the first signal that the ongoing rally is once again running out of steam.”