Spot gold extends pullback from new six-year high and establishes below $1500, which now acts as initial resistance and caps Tuesday’s action.
The yellow metal’s price holds in red for the fourth day as traders took profits of the latest rally and bullish tone softens on fresh risk sentiment, sparked by more optimistic tones from US/China trade talks.
Fresh bears generated initial negative signal on Monday’s close below psychological $1500 support that cracked pivotal $1500/$1490 support zone (psychological/mid-Aug higher base/Fibo 38.2% of $1381/$1557 ascend.
Bears may show hesitation to break through this zone, as deeply oversold daily stochastic and fading bearish momentum on daily chart suggest, but strong bearish signals on weekly chart (RSI is about to emerge from overbought zone, stochastic is heading south and momentum is trending down) signal deeper correction. Consolidation should be ideally capped by $1500/04 barriers (psychological/30DMA), with stronger upticks expected to stay below falling 5DMA ($1514) to keep fresh bears in play. Eventual break below $1490 pivot would spark extension towards $1463 (55DMA) and $1451/48 (daily cloud top/Fibo 61.8% of $1381/$1557) in extension. Only return and close above 20DMA (1519) would sideline bears and generate initial signal of an end of corrective phase.
Res: 1500; 1504; 1509; 1514
Sup: 1490; 1486; 1479; 1469
