Spot Gold Bearish traders are likely to aim towards testing the $1440 support area. Gold maintained its bid tone through the mid-European session on Wednesday and for now, seems to have snapped four consecutive days of losing streak.
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Meanwhile, the uptick lacked any strong bullish conviction through and the commodity remained well below the key $1500 psychological mark amid fading safe-haven demand.
Given this week’s breakthrough a near four-week-old ascending trend-line support and acceptance below the mentioned handle, the set-up remains tilted in favour of bearish traders. Moreover, technical indicators on the daily chart have just started drifting into the negative territory and further add credence to the near-term bearish outlook.
Traders, however, seemed to wait for a subsequent slide below another ascending trend-line support – extending from late-May swing lows – before positioning for an extension of the commodity’s recent corrective slide from multi-year tops, possibly towards testing a previous strong horizontal resistance-now-turned support near the $$1448-46 region.
The mentioned support coincides with 38.2% Fibo. level of the $1269-$1557 strong up-move and should act as a firm near-term base, which if broken will reaffirm that the commodity has already topped out in the near-term and pave the way for further weakness towards its next major support near the $$1420-15 region (50% Fibo. level).
On the flip side, any subsequent recovery move seems more likely to confront some fresh supply near the $1500 handle and should remain capped near the recent bearish breakdown point – around the $1504-06 region.
Sustained strength beyond the said hurdle could further lift the commodity towards the $1520-22 horizontal resistance.
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