Gold is up 0.4% to test $1,800 today
The gains on Friday were looking good before Fed chair Powell poured cold water on the party, seeing gold close below $1,800 at the end of last week.
But today, buyers are not letting up as we see a push back towards the figure level and more importantly, flirting with a break of a few key levels on the charts.
The first is the confluence of the key daily moving averages @ $1,793-94 and the second being the short-term trendline resistance from the 1 June to 3 Sept highs @ $1,790.
A hold above $1,800 will also be one to watch ahead of the close today as that may pave the way for buyers to start taking aim at the July to September highs around $1,834.
The latter is still the key resistance level to watch as that has been limiting gold gains and will be a major test for any further upside extension in gold moving forward.
As mentioned last week, I haven't been a fan of gold over the past few months but it looks like things are certainly starting to get interesting now so I'll be keeping an eye out. But also, as highlighted at the time:
Buyers may have to wait on the seasonal tailwind from around December to January for any potential trend higher in my view. Otherwise, considering the fundamental backdrop and key techncial levels above, any major upside for gold is rather limited.
Unless gold buyers can break above $1,834, perhaps gains may be more contained for the time being. But at least there is some upside potential on the charts building now.
