Weaker dollar and improved sentiment lift gold to 8-month high
Gold rises to 8-month high on Monday, lifted by weaker dollar on growing expectations that the Fed would further decelerate its policy tightening, as well as improving sentiment on top gold consumer – China, opening its borders.
The yellow metal advanced around 0.5% on Monday until the start of the US session, extending Friday’s 1.9% rally (the biggest one-day gain since Nov 10.
Bulls probe through the top of thickening weekly cloud ($1877), where headwinds are expected, as bullish momentum is fading on daily chart and stochastic indicator is showing bearish divergence.
Overall picture remains bullish and additionally underpinned by Friday’s bullish engulfing, with corrective dips likely to be shallow and offer better opportunities to re-join bullish action.
Bulls look for a break through weekly cloud top to attack targets at $1896/$1900 (Fibo 61.8% of $2070/$1614 / psychological).
Broken Fibo 50% of $2070/$1614 reverted to solid support which should ideally contain and guard pivotal support at $1832 (rising 10DMA).
Res: 1880; 1886; 1896; 1900
Sup: 1866; 1853; 1842; 1832