Spot Gold fell to $1261 in early Monday’s trading and came close to last week’s congestion low at $1260 (the lowest in past three weeks). Gold price slipped after US Congress reached agreement to fund the government and avert its shutdown, but remains within $1260/$1270 congestion.
Fresh weakness pressures the range floor, as technical studies on lower timeframes are negative and favor attack at pivotal support zone at $1260/58 (congestion floor/Fibo 38.2% of $1197/$1295 upleg) for extension of the pullback from $1295 (upside rejection at weekly cloud top) to signal deeper correction and open next strong points at $1253 (200SMA) and $1246 (55SMA/50% retracement).
Daily studies are in mixed mode, however, extension below 200SMA would generate stronger bearish signal and risk further weakness. Rising 20SMA caps the upside for now and is reinforced by falling 10 SMA( $1273).
Only sustained break here would signal stronger recovery and formation of higher base at $1260.
Res: 1270, 1273, 1275, 1278
Sup: 1261, 1260, 1258, 1253
