Spot gold regained traction on Monday, but gains were limited, retracing the small part of Friday’s 1% drop.
Near-term action lack direction but is expected to keep overall positive bias while holding above key supports at $1840 zone (200DMA/Fibo 38.2% of $1786/$1874 upleg/trendline support). Bulls need to break above $1867/$1874 pivots (Fibo 38.2% of $1998/$1786/last Friday’s high) to signal continuation of recovery leg from $1786 (May 16 low).
Bullish daily studies support the action, but markets await US inflation data (due on Friday) for fresh signals, as the yellow metal is seen as a hedge against inflation, although higher interest rates would also boost demand for the metal which yields no interest.
Strong supports lay at $1840 zone and $1828 (June 1 low/the floor of near-term range) break of which would weaken the structure and risk deeper drop on completion of double-top pattern.
Res: 1857; 1864; 1874; 1889.
Sup: 1847; 1840; 1828; 1820.
