- Finds some support just ahead of a multi-month-old ascending trend-line.
- Any further recovery might now confront fresh supply near $1500 handle.
- Bearish traders are likely to aim towards testing the $1450 support area.
Gold maintained its bid tone through the mid-European session on Wednesday and for now, seems to have snapped four consecutive days of losing streak. Meanwhile, the uptick lacked any strong bullish conviction through and the commodity remained well below the key $1500 psychological mark amid fading safe-haven demand.
Given this week’s breakthrough a near four-week-old ascending trend-line support and acceptance below the mentioned handle, the set-up remains tilted in favour of bearish traders. Moreover, technical indicators on the daily chart have just started drifting into the negative territory and further add credence to the near-term bearish outlook.
Traders, however, seemed to wait for a subsequent slide below another ascending trend-line support – extending from late-May swing lows – before positioning for an extension of the commodity’s recent corrective slide from multi-year tops, possibly towards testing a previous strong horizontal resistance-now-turned support near the $$1448-46 region.
The mentioned support coincides with 38.2% Fibo. level of the $1269-$1557 strong up-move and should act as a firm near-term base, which if broken will reaffirm that the commodity has already topped out in the near-term and pave the way for further weakness towards its next major support near the $$1420-15 region (50% Fibo. level).
On the flip side, any subsequent recovery move seems more likely to confront some fresh supply near the $1500 handle and should remain capped near the recent bearish breakdown point – around the $1504-06 region. Sustained strength beyond the said hurdle could further lift the commodity towards the $1520-22 horizontal resistance.
Gold daily chart