- Gold stages a goodish rebound from 100-day SMA support, around the $1849-48 region.
- Any subsequent move up might still be seen as a selling opportunity and remain capped.
- The technical set-up favours bearish traders and supports prospects for further weakness.
- The next relevant target on the downside is pegged near 61.8% Fibo. level, around $1822.
Having found a decent support near 100-day SMA, gold staged a goodish rebound on the first day of a new trading week and climbed to four-day tops on Tuesday. The commodity has found acceptance above the 50% Fibonacci level of the $1670-$2075 strong move up and seems poised to climb further. That said, any subsequent positive move is likely to confront a stiff resistance and remains capped near the $1900 strong horizontal support breakpoint.
Meanwhile, technical indicators on the daily chart maintained their bearish bias and are yet to register any meaningful recovery, adding credence to the negative outlook. Hence, the attempted recovery might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the mentioned support-turned-resistance.
On the flip side, immediate support is pegged near the $1861-60 region and is followed by 100-day SMA, around the $1849-48 zone. Bears might need to wait for a sustained breakthrough the mentioned support levels before positioning for any further slide. The commodity might then accelerate the fall towards the 61.8% Fibo. level support, around the $1822 area.