- Gold is struggling to capitalize on its positive intraday move beyond the $ 1,875 area.
- The formation of an ascending triangle supports the prospects for additional earnings.
- Neutral technical indicators on the daily chart warrant caution for the bulls.
Gold has opened with a bullish gap on the first day of a new week, although it has struggled to capitalize on the move and has remained limited below the $ 1,875 resistance zone.
Meanwhile, the recent bounce from near the $ 1,800 level has moved along an ascending trend line. The aforementioned trend line, along with the horizontal resistance at $ 1,875, constitutes the formation of an ascending triangle on the 1-hour chart.
Ascending triangles have a bullish bias and a sustained breakout to the upside would mark a turnaround for the XAU / USD. Therefore, some subsequent purchases above the resistance of the triangle should pave the way for an extension of the recent positive move.
The bulls could then aim to regain the round $ 1,900 level before finally pushing the precious metal to the $ 1,922-24 resistance zone. The positive momentum could extend further to test the next major resistance near the $ 1,960 region.
That said, the technical indicators on the daily chart have yet to confirm a bullish bias, which warrants some caution before positioning for any strong positive moves. This also makes it prudent to wait for a move above the resistance of the triangle.
On the other hand, any significant pullback could continue to find decent support near the uptrend line, currently near the $ 1,843-41 region. A convincing break below this region will negate the constructive outlook and spark some aggressive technical selling.
The XAU / USD could become vulnerable to weaken below the intermediate support of $ 1,830 and fall to challenge the round level of $ 1,800.
4 hour chart gold
Gold technical levels
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