Gold: XAU/USD renewed recovery progressing well – Near term weakness as a chance to buy [Video]
|Gold
The renewed recovery on gold has been progressing well in recent sessions. Closing back above $2000 was a positive signal, and now we look to use near term weakness as a chance to buy. It was interesting to see that the intraday spike lower on gold rebounded from $1977, all but maintaining the support around $1980. Furthermore, this is an area where the recovery uptrend sits on the hourly chart today. It means that the near term support at $1977 will be an interesting gauge. If this is broken, it would effectively complete a small top pattern and could drag gold back towards the $1940 area of support again. Additionally, if this support is breached, then it would suggest that the bulls may not be about to have the gold market all to themselves. Perhaps a more choppy market would begin to develop. We would still favour buying into supported weakness in this market though. Given the longer term bullish outlook for the technicals (and fundamentals for that matter), we are far happier sitting long on gold. The daily chart shows $1929 is the first real support of note as a higher low, which is also around the 23.6% Fibonacci retracement of the 5 month bull run from $1451/$2072. Near term resistance is at $2015 from yesterday’s high now. This morning’s little decline may just be a near term blip still, but how the market responds around $1977/$1980 support could be very important for the near term outlook.
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