Spot Gold moved higher on Monday, extending last Friday’s strong rally when yellow metal rallied, supported by weaker dollar, hit by weak US data.
Recovery rally from $1204 (10 July low) is riding on the third wave which commenced from $1214 (Friday’s low) and eyes its 100% Fibonacci expansion at $1236, to validate wave principles.
Next strong barrier lies immediately above at $1239 (double Fibonacci resistance, 38.2% of entire $1296/$1204 descend and 61.8% of $1258/$1204 downleg) and sustained break here would trigger fresh extension of recovery after initial reversal signal was generated on Friday’s rally above trendline resistance at $1223 (bear-trendline from $1296 peak).
Broken 200SMA offers immediate support at $1233, followed by $1229 (former highs of 5/6 July / top of thick 4-hr cloud) where dips should be ideally contained.
Res: 1236; 1239; 1242; 1244
Sup: 1233; 1229; 1225; 1220
