- Having formed a firm base near 100-hour SMA, Gold edged higher on Friday but lacked any strong follow-through on the first day of a new trading week.
- The yellow metal remained below a resistance marked by a short-term descending trend-line, which should act as a key trigger point for bullish traders.
The mentioned trend-line, along with another ascending trend-line constituted towards the formation of a symmetrical triangle on short-term charts. Against the backdrop of the recent upsurge since late-May, the triangle marks a pause in the trend and might now be categorized as a bullish continuation – Pennant chart pattern.
Meanwhile, technical indicators on 4-hourly/daily charts maintained their bullish bias and further reinforce the constructive set-up, though have struggled to gain positive traction on the 1-hourly chart and seemed to be the only factor holding investors from placing fresh bullish bets.
A convincing break through the triangle resistance, currently near the $1422 region, will set the stage for a move beyond the $1438-40 area – the recent multi-year tops, and lift the precious metal further towards testing its next major hurdle near the $1480 zone ahead of the key $1500 psychological mark.
On the flip side, any meaningful slide below 100-hour SMA support – currently near the $1407 region, might drag the commodity back below the $1400 handle but is more likely to attract some decent buying interest near the triangle support – around the $1390-89 area.
Failure to defend the mentioned support will negate any near-term bullish bias and confirm that the commodity might have actually topped out in the near-term, setting the stage for a further depreciating move back towards testing the $1348-46 horizontal support zone.
Gold 1-hourly chart
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