Gold rises on growing uncertainty but bulls look for more evidence to be validated
Spot gold edged higher on Wednesday after three days in red, boosted by risk aversion on lower stocks, political uncertainty and fears of recession, as raging inflation hurts economies while major central banks raise interest rates to curb rising prices that risks economic growth slowdown.
Traders are still cautious in taking positions but turn focus on safe-haven metal, due to a variety of factors which signal that migration into safety would be a possible preferred scenario.
Fresh advance probes through strong barrier at $1842/43 (50% retracement of $1879/$1809 bear-leg / 200DMA), close above which would improve near-term structure and shift focus towards pivotal levels at $1850 (Fibo 61.8%) and 1857 (Jun 16/17 double-top).
Despite positive initial signals, caution is still required as momentum remains negative on daily chart and falling thick daily cloud continues to weigh on near-term action .
Watch reaction on 200DMA for initial signal, with failure to break higher to keep the structure fragile and keep last week’s low ($1805) at risk, while sustained break higher would require confirmation on lift above $1857.
Res: 1850; 1857; 1861; 1874
Sup: 1833; 1823; 1815; 1805