Gold extended upside movement on Thursday, increasing the price of yellow metal to more than $1340, the highest level since March 18 following the release of Federal Open Market Committee (FOMC) monetary policy minutes and increase in the China imports. The long term sentiment remains bullish due to Higher High and Higher Low in the recent wave.
As of this writing, the precious metal is being traded near $1341 an ounce. A hurdle may be seen around $1342, the 23.6% fib level ahead of $1392, the swing high of the recent upside move and then the $1400 milestone. A break above the $1392 resistance area will print a Higher High on the daily chart, hence confirming the bullish momentum in the long run.
On the downside, the precious metal is expected to find a support around $1312, the 38.2% fib level ahead of $1304, the 100 Simple Moving Average (SMA) and then $1287, the 50% fib level as demonstrated in the above chart.
The imports of China increased by 5.5% last month as compared to 1.6% decline in the month before, a government report revealed earlier this week. The Asian nation is the largest consumer of the precious metal, so an increase in the imports spurred bullish momentum in the price of bullion.
The Federal Reserve releases the minutes from the FOMC monetary policy meeting on Wednesday. The policymakers didn’t signal earlier than expected hike in the benchmark interest rate which consequently spurred bearish momentum in the US Dollar.
Considering the overall technical and fundamental outlook, buying the yellow metal on dips still appears to be a good strategy, for this purpose the above mentioned support levels may prove to be good buying areas.
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