- Gold has been consolidating in a range over the past one week or so.
- The intraday set-up supports prospects for a retest of $1937-35 support.
- Move beyond 100-hour SMA should pave the way for additional gains.
Gold regained some positive traction on the last trading day of the week and recovered a part of the previous day’s losses to over one-week lows. The commodity held on to its intraday gains and traded above the $1950 level through the mid-European session.
Looking at the technical picture, the commodity has been oscillating in a range held over the past one week or so. The range-bound trading action constituted the formation of a rectangle on short-term charts, indicating a tug of war between bulls and bears.
Adding to this, neutral technical indicators on 4-hourly/daily charts haven’t been supportive of any firm direction. The technical set-up makes it prudent to wait for a sustained break through the trading range before positioning for the near-term trajectory.
Meanwhile, the yellow metal has now found acceptance below 100-hour SMA, which, in turn, favours intraday bearish traders. Hence, a slide back towards the trading range support, around the $1937-35 region, now looks a distinct possibility.
Conversely, some follow-through buying beyond 100-hour SMA has the potential to lift the commodity back towards the $1972-74 supply zone. A convincing break through the mentioned barrier will set the stage for a move towards the key $2000 psychological mark.