Gold has established below the $1,800 level after bouncing from $1,675-$1,685. However, the yellow metal needs to erode the crucial resistance at $1,835 to enjoy further gains towards the January high of $1,951, strategists at Standard Chartered report.
The tough part is to remove the $1,835 hurdle
“In a way, the easy part for gold is done. That is, the rebound from the crucial support at $1,675-$1,685. While a rebound from the support is not surprising, it is not a sufficient condition to ensure that the worst is over.”
“The yellow metal needs to break above a tough resistance on a horizontal trendline from July at $1,835. Until then, it would be premature to conclude that XAU/USD is out of the woods.”
“Any break above the $1,835 resistance would trigger a reverse head and shoulders pattern (the left shoulder at the June low of $1,749, the head at the August low of $1,684 and the right shoulder at the September low of $1,720), implying a possible rise towards the June high of $1,916, possibly the January high of $1,951.”
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