Gold snapped a three-week losing streak as a softer dollar and falling stocks prompted investors to seek safer assets. The precious metal benefited from a drop in the U.S. dollar index, hitting a near three-week high on Thursday, but gave up a portion of its gain on Friday. The market’s failure to break through the 1288 level dragged prices to 1283.50 and breaking below 1281.60 sparked a further selloff towards the 4-hourly cloud as anticipated.
XAU/USD is trading above the weekly and the 4-hourly Ichimoku clouds but we are still below the daily clouds. The bulls have the slight overall technical advantage, though they have to lift prices above the 1285-1283.50 zone to make an attempt to penetrate the daily cloud. A daily close above the 1296/2 area, where the bottom of the daily cloud resides, could provide the bulls the extra fuel they need to approach 1309.
To the downside, the initial support sits in 1274/1, followed by 1267/5. Closing below the 1265 level on a daily basis would pull the Chikou-span (closing price plotted 26 periods behind, brown line) below the (daily) cloud and encourage sellers. In that case, 1260 and 1255 could be the next targets. A decline below 1255 could trigger further weakness and pave the way towards the 1249 level, the top of the weekly cloud.
Comments
Log in or sign up to join the conversation.