As evident from the daily charts, Gold has been in a short-term uptrend as depicted by higher low higher high formation. On analyzing the weekly charts, we believe the medium-term bottom was in place. Our argument was supported by fact that it formed morning star candlestick formations (30/12/16) after the substantial down trend. Since, then it has been trading upward. Furthermore, the yellow metal is trading in an upward sloping channel, indicating support at lower levels. On daily time frame, 50-day EMA has crossed the 200-day EMA in the second week of April. The implication of the above crossover is bullish in the medium-term. In the short-term it may face resistance near (USD1300), since the RSI is approaching the overbought zone and the short-term correction cannot be ruled out from the said levels. Any declines, could be used for buying opportunities for the possible test of USD1340. The top of the rising trend channel and the longer-term declining tops trend line (marked in blue) is the resistance zone to be watched out. However, the current price action and the technical studies, suggest we will finally see a breakout above this resistance area (USD1340).
However, gold remains in a fragile state until key resistance levels are breached on the weekly charts. Also, yellow metal is yet to make a higher high on the weekly charts. Confirmation based on the above technical facts are to be watched, so as to see further accelartion in the current price rise. On the daily time frame the metal has moved out of the 200-day SMA. Also, gold is maintaining above the upward sloping trend line and previous swing low. Daily studies are pointing towards the possible test of the USD 1340 and USD 1380. Close above the said levels will intensify the buying pressure which would led the gold to test USD1485 (50% retracement level of USD1930 and USD1045 in the medium-term.
In the short-term yellow metal may face resistance near the falling trend line USD(1305) joining the top of 2012 and 2016 as marked 30in red line. In the short-term buying could emerge near the USD1255 and USD 1240. Any close below USD 1200 would negative the above bullish view.
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