Gold hovers below $2,400 – Bulls need acceptance above $2,421

Gold is struggling below $2400 in lack of triggers.
Markets seem to be pricing in tomorrow's Iniitial Jobless Claims.
Bears may target $2353 or even $2333
Reclaiming $2421 turns short term trend bullish.

Sunil Kumar Dixit SK Charting

As major markets begin to recover from sharp sell off, investment preferrence shifts focus to yielding assets, affecting safe haven rush to safety, often found in Gold.

Recent low of $2364 attracted some buyers and a bounce back rally started which fizzled out at $2418 yesterday where retail traders chose to collect profits as the metal failed to clear through immediate resistance $2421.

Today's sideways trades indicate some reluctance to bet for longs as the recovery from day low $2378 lacks strength and $2398 proves to act as immediate challenge.

Gold needs to break through $2398-$2402 barrier in order to extend gains to $2411-$2415-$2421 and bulls will get additional affirmation that short term may turn bullish if $2421 is strongly accepted, especially with a day close above the zone.

On the flip side, if $2402 remains active resistance, bears will continue to dominate downward price action leading to retest of $2378 and a break below $2378 will extend weakness exposing $2363-$2353.

Bearish correction may extend to $2333 in short term, if $2421 major resistance is not reclaimed.

Author

Sunil Kumar Dixit

SK Charting

Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.

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