- Gold captures some aggressive buying at the start of the American session and recovers to new daily highs.
- Mixed oscillators warrant some caution before opening aggressive bullish positions.
Gold has witnessed a radical change at the start of the American session and has risen more than $ 20 in the last hour. Gold prices have jumped to new daily highs, around the $ 1,860 / 61 region, and the bulls are now looking to take advantage of momentum above the resistance of a one-week downtrend line.
The emergence of some strong selling around the US dollar has been seen as one of the key factors driving some short coverage around gold, denominated in dollars. That said, a positive turn in the stock markets could limit any further gains for the safe-haven XAU / USD.
Also, the neutral oscillators on the daily chart and the slightly overbought RSI on the 1 hour chart warrant some caution for aggressive bulls. This makes it wise to wait for some solid continuation buying before positioning for any further bullish movement.
Therefore, any subsequent positive movement is likely to face strong resistance near the weekly highs, around the $ 1,868-70 zone. A sustained move above this region will be seen as a new trigger for the bulls and will help the XAU / USD regain the $ 1,900 level for the first time since Jan 8.
On the other hand, the $ 1,848-47 region now appears to defend the immediate drop. This is closely followed by support near the $ 1,840 area and weekly lows, around the $ 1,830 region. If the above levels are not defended, the XAU / USD could become vulnerable to further decline.
The move lower could then drag the yellow metal towards monthly lows, around the $ 1,800 level touched last week.
4 hour chart gold
Gold technical levels
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