Gold: Bulls Looking for a Break Above 1,411
Gold holds the gains from the recent rally above 1,400. USD weakness and an escalation in USA – Iran tensions around the Hormuz Straits boosts gold prices. Short covering on Friday also helped gold to reach 1,411 a level that we haven’t seen since 2013. FED dovish minutes opened the door for more cuts before the end of the year.
The momentum is bullish for the gold as it holds above all the major daily and weekly moving averages. My only concern is that the precious metal has reached overbought levels, so a pullback looks possible. The precious metal is trading in 10 dollar range with traders jump in and out of the market trying to catch the next wave. The immediate support for the yellow metal stands at $1,400 the daily low while more solid support can be found at the $1,357 the previous high. On the upside resistance would be met at 1411 the today’s high and then at 1,420 round figure. Traders must be cautious on gold at current level, I am waiting a correction, and will go long only if the precious metal closes convincingly above 1,411.