Spot gold advanced to the highest level in two weeks in early US session trading on Tuesday, driven by fresh safe-haven demand on renewed weakness in the stock markets and rising concerns about coronavirus epidemic negative impact on global growth.
Recovery leg from $1547 (5 Feb low) is riding on the third wave, which hit its 100% Fibonacci expansion ($1591) and requires validation on break above.
Bulls pressure strong barrier at $1593 (3 Feb high), violation of which would expose psychological $1600 level and FE 138.2% at $1603.
Bullish daily techs underpin the action, but overbought stochastic warns that bulls may face headwinds.
The notion is supported by bearish divergence of 4-hr stochastic.
Rising 10 and 20HMA’s ($1584 and $1580 respectively) on 4-hr chart should contain dips and keep bullish bias.
Only return and close below $1573/72 (rising 10/20DMA’s which formed bull-cross) would weaken near-term structure and sideline bulls.
Res: 1593; 1600; 1603; 1610
Sup: 1584; 1580; 1572; 1566
