- Gold struggled for a firm direction and remained confined in a three-day-old trading range.
- The technical set-up still favours bullish traders and supports prospects for additional gains.
Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Tuesday.
A strong rally in the global equity markets undermined the precious metal's safe-haven status and capped the upside. The negative factor was offset by some heavy USD selling, which extended some support to the dollar-denominated commodity.
Meanwhile, the downside remained cushioned near a previous strong horizontal resistance breakpoint, around the $1722-20 region. This comes on the back of the recent positive move along a short-term ascending trend-channel and favours bullish traders.
Bullish technical indicators on the daily chart – though have been struggling to gain traction – add credence to the constructive outlook. However, oscillators on hourly charts have been drifting lower in the bearish territory and warrant some caution.
Hence, it will be prudent to wait a sustained strength beyond the top end of a three-day-old trading range resistance, around the $1735-40 region, before positioning aggressively for any meaningful near-term appreciating move.
Above the mentioned barrier the commodity is likely to test an intermediate resistance near the $1755 level. Bulls might eventually aim back towards multi-year tops, around the $1765 region, en-route the trend-channel resistance, around the $1780 region.
Conversely, a convincing break below the $1722-20 support area might prompt some aggressive technical selling and turn the commodity vulnerable to accelerate the fall towards challenging the trend-channel support, currently near the $1700 mark.
Gold 4-hourly chart
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Technical levels to watch
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