- Builds on the overnight bullish break through key resistance levels.
- Overbought conditions on hourly charts warrant some consolidation.
Gold built on the previous session’s bullish move back above the key $1500 psychological mark and continued gaining some follow-through traction through the mid-European session on Friday.
Given the overnight break through the $1497-98 strong horizontal resistance, a subsequent move beyond a 1-1/2 month-old descending trend-line resistance was seen as a key trigger for bullish traders.
This coupled with the fact that oscillators on the daily chart have just started gaining positive momentum further reinforces a near-term bullish breakout and support prospects for additional gains.
Meanwhile, technical indicators on hourly charts are already flashing slightly overbought conditions and warrant some intraday consolidation, especially after the recent move to over two-week tops.
Hence, any follow-through momentum is likely to confront some supply near the $1512-13 region and remain capped ahead of October monthly swing high resistance – around the $1517-19 supply zone.
On the flip side, the descending trend-line resistance breakpoint, around the $1500 mark, now seems to protect the immediate downside and is closely followed by the $1497-98 horizontal zone.
Failure to defend the mentioned support levels might prompt some technical selling and accelerate the slide towards $1485 intermediate support en-route the next major support near the $1480 region.
Gold daily chart
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