Gold refreshes new high at $3,668, bulls eyeing $3,700-$3,750
- Major Central Banks step up Gold reserve.
- Surging safe haven demand adds bullish momentum in prices.
- Gold continues refreshing record highs, hits $3668.
- Despite overbought conditions Gold Bulls eyeing $3700-$3750.
- Break below $3630-$3620 will pause Bullish momentum.
Strong safe haven demand fuelled by increasing bets on rate cut by Fed, worsening labour markets, rising unemployment in the US, Dollar Index plunging to 97 level, together make a formidable mix for Gold rising to new record highs on every move, unhindered, without any significant pullback.
Daily chart shows RSI reading above 80 indicating overbought conditions which may bring a significant correction towards immediate support zone $3585-$3575 below which retracement may extend to $3545-$3525.
On the higher side, consolidation above immediate hurdle $3668 will extend upside potential towards $3683-$3688 while major resistance sits at $3703-$3713.
Markets are closely waiting for rate cut by Fed on 17th September meeting which is likely to further weaken Dollar and boost Gold prices.
Recent releases of key employment data on ADP, Non Farm Payrolls, Jobless Claims have increased economic woes and geo political scenario remains fragile.
Though Gold remains bullish with no significant pullback, the current strength is prone to sudden profit booking risks and break below immediate support zone $3630-$3620 will prompt a quick drop to $3600 followed by $3585-$3575.
If this zone fails to hold, expect deeper retracement exposing $3545-$3525.
4 hour chart shows Gold trading inside ascending channel which urges caution on heights of a potential correctional decline with momentum shifting to temporary bearish decline towards support zone.
Author
Sunil Kumar Dixit
SK Charting
Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.
