Gold remains in green for the fourth consecutive day and rose to the highest levels since Mar 19 in early Tuesday trading, in extension of Monday’s strong acceleration (gold was up nearly 3.5% for the day, in the biggest daily gain since Feb 6).
Monday’s break and close well above pivotal $4600 resistance zone (Fibo 38.2% of $5419/$4099 descend / 100DMA) generated strong signal of continuation of recovery leg from Mar 23 $4099 spike low, which paused for one week within $4600/$4305 range trading.
The latest geopolitical developments on President Trump’s signals that the war in the Middle East can end within 2-3 weeks, revived risk appetite that sent the dollar lower and boosted demand for the yellow metal.
Further action will be mainly depending on the length of fresh positive sentiment, as messages from President Trump were often short-lived and usually not allowing for stronger positive market developments.
Assumption that the conflict is heading towards its end would maintain or even boost positive sentiment that would continue to lift the price.
Immediate resistance lays at $4759 (50% retracement / daily Kijun-sen), followed by $4800 (falling 20DMA) and $4915/21/35 (Fibo 61.8% / 55DMA / daily cloud base).
Technical picture on daily chart has improved (break of 100 DMA / 5/10DMA bull-cross) but still requires more evidence as north-heading 14-d momentum is in negative territory, RSI moves into neutrality zone and stochastic is overbought.
This keeps in play scenario of a healthy correction before larger downtrend from $5419 lower top resume, particularly in case of insufficient support from the fundamental side.
Sustained break of $4759 (50% retracement) would provide further boost to developing bulls and brighten near term outlook.
Caution on return below 100DMA ($4642) that would risk test of former pivotal barrier, now acting as solid support at $4600, loss of which would sideline near term bulls.
Res: 4759; 4800; 4841; 4900.
Sup: 4661; 4642; 4600; 4532.
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