Gold price bounces on Wednesday after hitting four-month low at $1301 on Tuesday’s bearish acceleration which also cracked strong support provided by 200SMA at $1303.
The yellow metal recovers on weaker dollar ahead of FOMC, as traders are booked profits on recent strong rally.
Oversold conditions signal corrective action, however, strong bearish sentiment on firm greenback and significantly reduced safe-haven demand, keeps gold price under strong pressure and suggests limited recovery.
Broken Fibo 38.2% support / yesterday’s high, mark initial barrier at $1316, while stronger upticks are expected to stall under 100SMA ($1321), as resistance is reinforced by falling 10SMA, which attempts to form bear-cross.
Bearish scenario requires break below psychological $1300 support to open way towards $1285 (Fibo 61.8% of $1236/$1366 rally).
Only break and close above 100/10 SMA’s would sideline downside risk and signal stronger correction of $1355/$1301 fall.
Res: 1311, 1316, 1321, 1323
Sup: 1303, 1300, 1289, 1285
