Gold edges higher but gains likely to be limited
Spot gold price rose on Monday, generating initial signal of bullish continuation after the action in past two days moved in a large swings but without direction, leaving a double – Doji candles, one with long tail and the other with long upper shadow.
Weaker dollar contributed to metal’s fresh strength, but near-term bullish structure is still fragile, and gains could be short-lived, as signals that Fed remains on aggressive path on interest rate hikes, would continue to underpin the dollar.
Daily techs support scenario as momentum, although heading north, is still deeply in negative zone and stochastic is about to enter overbought territory, while moving averages are in mixed setup.
Fresh advance cracked pivotal Fibo barrier at $1672 (38.2% of $1765/$1614 and pressuring falling 20DMA ($1677), with sustained break here to firm near-term structure for further recovery which should be capped at key $1690/$1700 zone.
Repeated failure to register daily close above $1672 would keep the downside vulnerable and generate initial signal of possible recovery stall.
Res: 1672; 1277; 1690; 1700
Sup: 1655; 1650; 1641; 1622