SPOT GOLD extends recovery but risk of recovery rally stall exists
Spot Gold remains supported and extends recovery on Wednesday, heading towards strong resistance at $1267 (200SMA / 50% retracement of $1299/$1236 descend).
The yellow metal moved higher after Tuesday’s action ended in Doji candle as the dollar remained soft after initial optimism over US tax overhaul faded.
Break above $1267 would trigger further retracement of $1299/$1236 descend and unmask key barriers at $1275 (Fibo 61.8%) and $1280 (base of thick daily cloud).
On the other side, 20/200SMA death-cross weighs and overbought slow stochastic warns of recovery stall.
Broken Fibo 38.2% level, former pivotal barrier, now acts as initial support, ahead of lower pivot at $1253 (sideways-moving 10SMA) which is expected to contain extended dips.
The pace of recent rally would slow as volumes are expected to thin ahead of Christmas holidays.
Res: 1267; 1275; 1280; 1284
Sup: 1260; 1253; 1250; 1244