Gold outlook: Price rises on renewed geopolitical tensions
|XAU/USD
Gold jumped on Friday (up 0.7%) until early US trading as fresh rise in geopolitical tensions boosted safe haven demand.
Friday’s acceleration generated clearer direction signal after the action in past three days showed a gradual recovery but was shaped in long-legged Doji candles and warning of unclear situation.
Fresh gains so far retraced nearly 50% of Monday’s sharp fall (the price was down 3.3% after firmer signals of a ceasefire in the Middle East hurt metal’s safe haven appeal.
Improving picture on daily chart (rising 14-d momentum emerged from oversold territory, converged daily Tenkan/Kijun-sen about to form a bull-cross) support the action, although bulls need to clear pivotal barriers at $2663/69 (daily Kijun-sen / 50% retracement of Monday’s fall) to further firm near-term structure, with break above the top of rising daily cloud ($2676), to validate reversal signal.
However, gold is on track for weekly and monthly close in red, with long tails of candles of both timeframes point suggest that bids are still strong and reduce risk of deeper pullback from now, although overbought monthly studies require caution.
Res: 2663; 2669; 2676; 2693.
Sup: 2634; 2620; 2605; 2600.
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