- Gold was seen consolidating its recent gains to two-week tops.
- The set-up supports prospects for a further appreciating move.
- Bulls might wait for a move beyond the $1880 congestions zone.
Gold remained confined in a narrow trading band through the mid-European session and consolidated this week’s solid rebound from the vicinity of the $1800 mark.
Currently hovering around the $1872 region, any subsequent positive move is likely to confront stiff resistance near the $1880 congestion zone. The mentioned barrier coincides with the 50% Fibonacci level of the $1959-$1803 recent leg down and should act as a key pivotal point for short-term traders.
Meanwhile, technical indicators on hourly charts maintained their bullish bias and have just started moving into the positive territory on the daily chart. The set-up supports prospects for additional gains amid sustained US dollar selling, which tends to benefit the dollar-denominated commodity.
That said, bulls might still wait for a sustained move beyond the $1880 hurdle before placing fresh bets and positioning for any further appreciating move. The XAU/USD might then accelerate the positive momentum and aim back to reclaim the $1900 mark, representing the 61.8% Fibo. level resistance.
On the flip side, the 38.2% Fibo. level, around the $1863-62 region, now seems to protect the immediate downside. Any further decline is likely to attract some dip-buying around the $1855 region. This, in turn, should help limit the downside near the 23.6% Fibo. level, around the $1840 area.
XAU/USD 4-hourly chart
Technical levels to watch