Gold benefited from USD weakness

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 19, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    After paring early gains, on the back of safe-haven demand on failed talks in Doha, Gold settled with marginal loss on Monday. On Tuesday, broad USD weakness seems to increase appeal for investment in Gold. During early European session, the yellow metal surged higher and at the time of writing is trading at the high point of the day, $1245.

    Gold set to gain further
    Although, a further up-move closer to the very important $1250 psychological mark cannot be negated but with H1 RSI already reading above 70 (indicating slightly over-bought conditions) short-term traders are likely to turn cautious before initiating fresh long positions. Hence, the metal seems more likely to either consolidate at current levels or possibly provide a dip back below $1240 mark ($1239-38 area) which would be seen as an opportunity by bulls to initiate intraday long positions.

    Beyond $1250 psychological mark resistance, the yellow metal has the potential to extend the momentum immediately towards $1254 ahead of a very strong resistance near $1258 area.

    Alternatively, sustained weakness back below $1235 seems to force bulls to unwind their short-term positions, thus leading to a further downside pressure on prices possibly towards support near $1225-24 region (last week’s lows).
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