Spot gold extends advance into a fifth straight day and hit the highest in four weeks on Wednesday.
Fresh strength emerges above the month-long range, signaling that metal’s price is establishing in a fresh direction, after holding in directionless mode since mid-March.
The yellow metal is becoming again interesting for investors, as safe-haven asset, as well as a hedge against inflation.
Soaring inflation in a number of developed economies, as the war in Ukraine caused energy and commodity prices to rally, fading risk appetite on growing uncertainty and expected slower growth that boosts fears about recession, boost demand for the metal and lift the price.
Bulls cracked important barrier at $1980 (50% retracement of $2070/$1890) on Wednesday, with sustained break here to open way for renewed attack at psychological $2000 level (also Fibo 61.8% of $2070/$1890).
The action is supported by rising and thickening daily cloud and a higher base that has formed at $1900 zone on a weekly chart, also underpin the action.
Daily studies are mixed and suggest bulls may face headwinds on approach to $2000 pivot, but firmly bullish weekly techs point to strong underlying uptrend and signal limited dips (ideally to be contained by daily cloud top at $1952) could precede fresh acceleration higher and repeated probe above $2000, after early March rally peaked at $2070 but failed to hold gains that resulted in a pullback to $1900 zone.
Res: 1980; 1990; 2000; 2009.
Sup: 1966; 1958; 1949; 1942.
