Gold buyers need validation from $1,980
Gold refreshed its monthly high as strong US inflation underpins the safe-haven demand for the metal. In doing so, the bullion also justifies late March’s rebound from 61.8% Fibonacci retracement of January-March upside, as well as the ability to stay beyond the 21-DMA. However, the precious metal is yet to cross a seven-week-old horizontal resistance zone, around $1,975-80, which in turn requires the bull’s caution. Also acting as an extra upside filter is the 23.6% Fibo level surrounding $2,001, a break of which will highlight the latest peak of $2,070.
Meanwhile, the 38.2% Fibonacci retracement level near $1,960 and the 21-DMA of $1,937 could test the short-term sellers of gold. However, the bulls remain hopeful until the quote stays beyond the 61.8% Fibonacci retracement level around $1,891. Should the commodity drop below the key Fibo level, late January’s swing high around $1,853 and the $1,800 threshold can offer additional support to the prices before directing them to the yearly low of $1,780.
Overall, gold buyers are in the form but they must overcome the crucial barrier before eyeing further ruling.
