Gold technical analysis: Once again rebounds from ascending trend-line/23.6% Fibo. confluence support

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  • Reviving safe-haven demand helped defend 3-1/2-month-old ascending trend-line support.
  • The intraday uptick lacked any strong follow-through, rather seemed to have lost momentum.

Gold on Friday ended on a downbeat note and recorded its third consecutive week of declines, albeit once again managed to find decent support near a 3-1/2-month-old ascending trend-line. A drone strikes on the world’s largest crude-processing facilities in Saudi Arabia intensified geopolitical tensions in the Middle East and led to a bullish gap at the start of a new trading week.
 
The global flight to safety lifted the precious metal back above the key $1500 psychological mark, though bulls lacked any strong conviction amid encouraging trade-related developments. This coupled with a follow-through pickup in the US Treasury bond yields, which although failed to revive the USD demand, further collaborated toward capping the non-yielding yellow metal.
 
The mentioned ascending trend-line coincides with 23.6% Fibo. level of the $1269-$1557 strong up-move and should act as a key pivotal point for bearish traders. A sustained break below the confluence support should pave the way for an extension of the recent corrective slide towards testing a previous strong horizontal resistance-now-turned support near the $$1448-46 area.
 
Meanwhile, technical indicators on 4-hourly/daily charts have struggled to gain any meaningful traction and eased on the 1-hourly chart, suggesting the loss of intraday positive momentum. However, it will be prudent to wait for a sustained break through the mentioned support before positioning for an extension of the commodity’s recent corrective slide from multi-year tops.
 
On the flip side, any subsequent up-move beyond the intraday tops – near the $1512 zone – might confront some supply near the $1522-24 region (post-ECB volatility swing high), which if cleared now seems to set the stage for a move back towards $1540 intermediate resistance en-route multi-year tops – around the $1555-57 area. 

Gold daily chart

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