Technical Analysis: Gold teases monthly support line following failures to cross $1,900

Technical Analysis: Gold teases monthly support line following failures to cross $1,900

Gold trades defensive despite the US dollar gauge’s (DXY) slump to the fresh low since April 2018. The yellow metal’s repeated failures to cross $1,900, not to forget 61.8% Fibonacci retracement of November’s downfall, drag it to an upward sloping trend line from November 30, currently around $1,875. With the sluggish MACD and neutral RSI joining the lower high formation since December 21, gold is likely to retest the 200-SMA level of $1,852. Though, any further downside past-$1,852 will have multiple supports around $1,845 to tackle before directing the bullion bears toward the December 14 low near $1,818.

Meanwhile, sustained trading beyond the 61.8% Fibonacci retracement level of $1,888 needs to break a short-term resistance line, at $1,897 now, as well as the $1,900 mark before challenging the monthly peak surrounding $1,907. If at all the gold buyers manage to cross $1,907, November’s peak near $1,966 will be in the spotlight. Overall, chatters surrounding the US stimulus and virus vaccine seem to keep the risks positive, which in turn can restrict gold’s short-term downside. However, challenges to the risks may recall US dollar buyers to weigh on the commodities.

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