Gold's Upward Surge: Bulls Eyeing $1985 as Precious Metal Gains
GOLD
"Gold's Upward Surge: Bulls Eyeing $1985 as Precious Metal Gains Momentum"
MY COMMENTARY:
Gold’s chart pattern as from my analysis yesterday, could hit $1936 to $1925 area. In today’s session the metal dip below $1932 before a swift powerful rebound towards $1955 (at the time of this writing).
As my sentiment, whether or not Gold push towards $1985 is a matter of optimism in the market. A lot could go wrong in the meantime, what's more significant is the reaction of the markets today, which can provide an indication of what to expect before the release of US jobs data on Friday.
FUNDAMENTAL:
The US dollar has recently gained increased support as the probability of a Fed Fund rate hike in June has risen. Currently, the market is estimating a 56% chance of a 25 basis points hike in June, compared to 28% a week ago. This week, the US non-farm payrolls (NFP) and jobs data could further increase the likelihood of a rate hike if the labor market continues to show resilience.
TECHNICAL ANALYSIS:
Regarding the technical outlook for gold, there have been indications of further downside due to improving sentiment and a strong dollar. However, yesterday's daily candle closed as an inverted hammer, suggesting a potential shift and upward bounce today. After a decline in the Asian session, the European session has witnessed a slight retreat in the Dollar Index (DXY), leading XAUUSD to rebound off the 100-day moving average and trade at $1945/oz at the time of writing. If the bounce continues, the $1950 level will be a challenge, followed by resistance around $1958 and $1970 respectively. In case bulls gain control and the rally strengthens, the 50-day moving average currently sits around the $1991 level.
On the other hand, if the price breaks below the 100-day moving average around $1936, there is a possibility of revisiting the $1925 level before potentially declining further towards the psychological $1900 mark. Gold's outlook is interesting as a debt ceiling deal could reduce safe haven demand, putting pressure on the precious metal. Conversely, a weaker dollar could support further upside movement as bulls and bears continue to vie for position.
KEY LEVELS
Support Levels:
* 1936 (100-day MA)
* 1925
* 1900
Resistance Levels:
* 1958
* 1970
* 1991 (50-day MA)
MY POSITION: I have been scalping, gaining opportunity hoping Gold moves in a consolidation area. Before any news breaks this week, I’m aiming for $1965 level for a long position. And with a short position targeting $1945-$1940. However, I’m rooting for a $1970-$1985 target.