Gold has seen its expected move to new record highs and strategists at Credit Suisse are starting to see signs of temporary overextension. Therefore, they expect the yellow metal to experience a consolidation phase before resuming the uptrend towards the $2000 psychological mark.
“Gold strength has accelerated dramatically again and we have now seen the long-looked for move to a new record high above $1921. With near-term signs of overextension now showing a pullback/consolidation should clearly be allowed for after such a strong and headline-grabbing move.”
“Our bias remains though to view weakness as corrective only and we maintain our core bullish bias with resistance then seen next at the psychological $2000 barrier, before what we see as its next tougher resistance test at Fibonacci projection resistance at $2075/80. Whilst our bias would be to look for a consolidation phase to unfold from here, a direct break can see resistance at $2175/80 next, then $2295/2300.”
“Support for a pullback is seen at $1804/1796, then $1765, with $1671 ideally holding.”
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