Gold keeps firm tone on Thursday and extends Wednesday’s 1.3% advance, sparked by softer than expected US June inflation.
Fresh bulls cracked pivotal resistance zone at $1961/64 (55DMA / Fibo 38.2% of $2080/$1892) and hit the highest in almost one month, with firm break here to confirm reversal signal on daily chart, after larger bears were trapped under $1902/00 (Fibo / round-figure supports).
Also, bullish weekly close will contribute to developing reversal signal on weekly chart.
The metal was lifted by strong fall of US dollar, weakened on speculations that Fed’s tightening cycle is nearing its end, with upbeat June CPI numbers adding to idea and contributing to support from bullish daily techs.
However, bulls are likely to face increased headwinds at this zone as 14-momentum turned sideways, stochastic is strongly overbought and falling and thickening daily cloud above the price, weighs.
Limited correction so far seen as likely scenario, with dips expected to find support above $1940 zone to keep bulls in play for final push through $1964 pivot and challenge of daily cloud base ($1981) and unmask psychological $2000 barrier.
Converged daily Tenkan-sen and Kijun-sen ($1933) mark pivotal support, loss of which would sideline bulls.
Res: 1964; 1981; 1986; 2000.
Sup: 1952; 1940; 1936; 1933.
