Gold Price Analysis: XAU/USD bulls await a sustained move beyond descending triangle resistance
|- Gold built on the previous day’s positive move and gained some follow-through traction on Tuesday.
- The set-up seems tilted firmly in favour of bullish trades and supports prospects for additional gains.
Gold edged higher through the mid-European session and climbed to two-week tops, around the $1972 region in the last hour.
Bulls are now looking to build on the momentum further beyond an important confluence resistance – comprising of a near one-month-old descending trend-line and 50% Fibonacci level of the $2075-$1863 corrective slide.
The mentioned trend-line, along with a strong horizontal support near the $1900 mark, constituted the formation of a descending triangle. A convincing breakthrough will set the stage for a further near-term appreciating move.
The constructive outlook is further reinforced by the prevalent USD selling bias. This coupled with the fact that oscillators on hourly charts maintained their bullish bias and have again started gaining traction on the daily chart support prospects for additional gains.
Hence, a subsequent positive move towards 61.8% Fibo. level, around the $1995 region, now looks a distinct possibility. Some follow-through buying beyond the key $2000 psychological mark should pave the way for a move towards the next major hurdle near the $2015 horizontal level.
On the flip side, the $1960-59 region now seems to protect the immediate downside, below which the commodity could slide back towards the 38.2% Fibo. level, around the $1942-40 area. Failure to defend the support levels might turn the metal vulnerable to slide further.
Bearish might then aim to test the $1920-15 intermediate support before eventually dragging the commodity back towards the $1900 strong support.
Gold 4-hourly chart
Technical levels to watch
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