- Gold picks up steam towards a key resistance region ahead of US Independence day
- Short-term bias is positive, but an extension above 2,352 is necessary
- ISM services PMI, ADP employment, FOMC meeting minutes on the agenda
Gold bulls returned with stronger positive momentum on Wednesday and hit an almost two-week high of 2,287. This came after Fed chairman Powell acknowledged progress on inflation and as investors awaited a slew of US data before the 4th of July holiday break.
The precious metal rejected any declines below June’s low of 2,287 and entered a new recovery phase. With the RSI and stochastic oscillator still not in overbought territory, there is potential for more progress, but the examination of May’s resistance trendline and the 200-period SMA calls for caution.
Slightly higher, the 38.2% Fibonacci retracement of the May-June downleg and the ascending line from May at 2,348-2,352 could be a threat as well. Therefore, a decisive close above that border is expected to eliminate downside risks and prompt a swift rally towards the 50% Fibonacci mark of 2,368, where June’s aggressive bullish action peaked. Beyond that, the price could undergo another impressive bull run towards the 61.8% Fibonacci of 2,387, a break of which would positively change the short-term perspective.
In the opposite scenario, the price could seek support somewhere between 2,328 and 2,318. If there is no pivot there, a sharp decline towards the 2,295-2,300 region is possible. Another step lower and beneath June’s low of 2,287 could reach April’s restrictive territory around 2,265.
To sum up, gold has revived its bullish appetite and may have its sights set on higher levels in the coming sessions. For that to happen, the price must jump the wall near 2,352.
