Gold could not sustain its strength above the 1,965 bar on Tuesday, falling aggressively towards the 1,938 floor in the aftermath.
The previous metal switched to recovery mode on Wednesday, though the mixed technical signals in the four-hour chart provide no clear direction. Traders would like to see a close above the constraining falling line at 1,950 before they again turn their attention to the 1,965 barricade. Notably, the 23.6% Fibonacci retracement of the 2,079-1,932 downtrend is placed here too. If that wall collapses, the price may accelerate towards the 200-period simple moving average (SMA) and the 38.2% Fibonacci level of 1,987. Another bullish breakout there could clear the way towards the 2,000 psychological mark.
Failure to jump successfully above 1,950 may bring the 1,938 base back under the spotlight. If the bears exit the range below 1,930, the price may initially pause around the 1,900 number and then head towards the 1,887 region in order to meet the descending line from March 20.
In a nutshell, gold traders are in a wait-and-see mode. A significant move above 1,985 could brighten the short-term outlook, whilst a drop below 1,931 would re-activate May’s downfall.
