- Barring a knee-jerk spike earlier this month, Gold has been oscillating between two converging trend-lines over the past three-weeks, forming a symmetrical triangle on short-term charts.
- Against the backdrop of the recent upsurge since late-May, the triangle constituted towards the formation of a bullish continuation – Pennant chart pattern, marking a pause in the trend.
Moreover, technical indicators on the daily chart maintained their bullish bias and further reinforce the constructive outlook, though have struggled to gain positive traction on hourly charts and seemed to be the only factor holding investors from placing fresh bullish bets.
Meanwhile, the 100-period SMA on the 4-hourly chart now seemed to act as a key pivotal point, below which the precious metal could extend the pullback further below the key $1400 psychological mark towards testing the triangle support, currently near the $1389-87 region.
A convincing break through the mentioned support will negate any near-term bullish bias, confirming that the commodity might have actually topped out in the near-term and setting the stage for a further depreciating move back towards testing the $1348-46 horizontal support zone.
On the flip side, bullish traders are likely to wait for a sustained move beyond the triangle resistance, currently near the $1425 region, above which the yellow metal is likely to surpass multi-year highs resistance near the $1440 level and aim towards reclaiming the $1500 round figure mark.
Gold 4-hourly chart