- A combination of diverging forces failed to provide any meaningful impetus to gold on Tuesday.
- Acceptance above 200-hour SMA/23.6% Fibo. confluence supports prospects for additional gains.
- Mixed oscillators warrant some caution before positioning for any further appreciating move.
Gold seesawed between tepid gains/minor losses through the mid-European session and was last seen trading in the neutral territory, around the $1810 region.
A goodish US dollar rebound from six-week lows was seen as a key factor that capped gains for the dollar-denominated commodity. However, a turnaround in the risk sentiment extended some support to the safe-haven XAU/USD and helped limit the downside.
From a technical perspective, the commodity has found acceptance above the $1805-07 confluence region. This comprises of 200-hour SMA and the 23.6% Fibonacci level of the $1959-$1760 downfall, which should act as a key pivotal point for intraday traders.
Meanwhile, technical indicators on hourly charts are holding in the positive territory but are yet to confirm a bullish bias on the daily chart. This, in turn, warrants some caution for aggressive bullish traders and positioning for any further positive move.
Hence, any subsequent strength is likely to confront resistance near the $1823-25 horizontal zone. This is followed by the 38.2% Fibo. level, around the $1835 region, which if cleared will set the stage for an extension of the recent bounce from multi-month lows.
On the flip side, weakness below the $1805-07 confluence region, leading to a breakthrough the $1800 mark will negate any near-term positive bias. The XAU/USD might then turn vulnerable to accelerate the slide towards the $1775-72 intermediate support.
The downward trajectory could further get extended and drag the commodity back towards the $1760 region, or seven-month lows touched last Friday.
XAU/USD 1-hourly chart
Technical levels to watch
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