SPOT GOLD – weaker dollar inflates gold price; plethora of barriers comes in focus
Spot Gold regains traction and pressures Thursday’s one-week high at $1259 after shallow correction was contained at $1250.
The dollar eased on Friday on fresh concerns over US tax reform, boosting gold’s price.
Recovery leg from $1236 (12 Dec low) looks for break of pivotal barrier at $1260 (Fibo 38.2% of $1299/$1236 descend), to generate stronger bullish signal for extension towards next strong barrier at $1267 (200SMA / 50% retracement).
Initial bullish signal that was generated on today’s break above falling 10SMA (currently at $1255) supports the notion.
However, overall bearish structure requires caution as recovery rally is seen limited before bears regain full control.
Failure to clear $1260 will be initial signal of early rejection while extended recovery leg should remain capped by $1267/70 barriers (converging 200/20 SMA’s) to keep bearish scenario intact.
Conversely, sustained break higher would sideline bears for stronger correction of $1299/$1236 bear-leg.
Res: 1260; 1264; 1267; 1270
Sup: 1252; 1250; 1247; 1240