SPOT GOLD – limited recovery seen ahead of fresh weakness
|GOLD
Spot Gold is consolidating on Monday after Friday’s sharp fall on upbeat US jobs data which boosted hopes for Fed’s more aggressive approach to US monetary policy this year.
The yellow metal fell by 1.3% on Friday in the biggest one-day fall in nearly two months, generating bearish signal on completion of H&S pattern on daily chart as well as strong bearish weekly close.
Improved sentiment for the US dollar keeps gold price at the back foot, with limited recovery action seen ahead of fresh weakness.
Broken H&S neckline ($1340) and broken 10SMA ($1343) mark solid resistances which are expected to limit upside attempts and keep near-term bearish bias intact.
Bears could extend to $1316 (Fibo 38.2% of $1236/$1366, 12 Dec / 25 Jan rally) on break below Friday’s low at $1327.
Conversely, immediate bears could be delayed if recovery rally clearly breaks above 10SMA, while lift above lower top at $1351 (01 Feb) is needed to neutralize bears and signal that corrective pullback from $1366 to $1327 might be over.
Res: 1340; 1343; 1351; 1357
Sup: 1327; 1324; 1320; 1316
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