Gold outlook: Bulls take a breather, dips likely to be shallow and find ground above key 2,600 support
Gold
Gold edged lower from new record high ($2670) early Wednesday, taking a breather after advancing 1.10% on Tuesday, lifted by weaker dollar on expectations that the Fed may continue with stronger rate cuts.
People’s Bank of China decision to cut rates, prompted Chinese investors into safe haven, adding support to metal’s price.
Strongly overbought daily studies and fading bullish momentum, generate initial signal of pullback, with similar picture seen on 4-hr chart however, overall strong bullish structure and supportive fundamentals point to mild correction before bulls regain traction for attack at initial target at $2675 (Fibo 238.2% projection of the upleg from $2286) and psychological $2700 barrier.
Dips were so far contained above initial supports at $2650/45, guarding $2637 (55HMA) and $2623 (hourly higher base).
Potential deeper pullback should find ground above key near-term support at $2600 (psychological / 10DMA) to keep larger bulls in play.
Res: 2670; 2675; 2700; 2714.
Sup: 2650; 2645; 2637; 2623.
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Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
