3 May 2016
Gold unable to sustain above $1300 handle
Gold reversed from early European session high of $1301.79 to trade absolutely flat from yesterday's close near $1292 level.
The metal has failed to build on to its recent gains beyond $1300 mark. Broad recovery in the US Dollar on Tuesday seems to cap the precious metal's near-term upward trajectory.
Moreover, the metal seems to have formed a bearish divergence as prices continue to scale new highs but RSI reading doesn't seem to confirm the price action. The occurrence of a bearish divergence could be the first signs of weakening momentum. Hence, traders are likely to turn cautious at higher levels.
Technical levels to watch
From current levels, weakness below $1285 immediate support is likely to get extended towards $1270 horizontal support. A break below $1270-65 support region would confirm the bearish divergence signal and would open room for further near-term corrective move.
On the upside, the metal has repeatedly failed to sustain above $1300 handle, which remains key level to conquer for any further near-term up-move. On a sustained strength above $1300 mark, the yellow metal could immediately dart towards testing 2015 high level of $1307 ahead of August 2014 highs resistance near $1322 region.
The metal has failed to build on to its recent gains beyond $1300 mark. Broad recovery in the US Dollar on Tuesday seems to cap the precious metal's near-term upward trajectory.
Moreover, the metal seems to have formed a bearish divergence as prices continue to scale new highs but RSI reading doesn't seem to confirm the price action. The occurrence of a bearish divergence could be the first signs of weakening momentum. Hence, traders are likely to turn cautious at higher levels.
Technical levels to watch
From current levels, weakness below $1285 immediate support is likely to get extended towards $1270 horizontal support. A break below $1270-65 support region would confirm the bearish divergence signal and would open room for further near-term corrective move.
On the upside, the metal has repeatedly failed to sustain above $1300 handle, which remains key level to conquer for any further near-term up-move. On a sustained strength above $1300 mark, the yellow metal could immediately dart towards testing 2015 high level of $1307 ahead of August 2014 highs resistance near $1322 region.