Gold clocks 3-month highs over bullish technical posturing

A DOVISH hold on US monetary policy has kept the greenback on its back foot while strengthening bullion appeal, as investors deliberate opportunity costs for the precious metal. Bullish technical posturing (chart patterns) kept gold prices positive despite renewed global risk appetites and an extended rally in the US equity market. Escalating tensions in the Middle East lent further strength to the yellow metal as investors sought safe haven shelter over heightened geopolitical risks.

What should investors look out for in the longer term?

A strong rally in risk assets has yet to deter gold prices from moving north as traders fixate against persistent US dollar weakness and looming tensions in the Middle East. Seasonality trends along with strong Asian retail buying activities has lent further support to the precious metal. Though we remain dim on bullion prospects over signs of stability in the global economy, bullish technical posturing and simmering geopolitical tensions will keep gold prices solid for the immediate term.

Technical Analysis for Spot Gold (XAUUSD)

Gold prices rallied upwards strongly as market bulls breached key technical level of US$1,525.00. The precious metal has extended gains for the fourth consecutive week as gold bulls retain control of the positive trend scenario. A successful breach at 2019-highs of US$1,559.00 will support a bullish rise in price levels as market forces target the next main station of US$1,578.00. On the flip side, failure to hold price levels above US$1,525.00 will effect a bearish correction towards key trend line support of US$1,510.00.

Weekly Market Assessment:

Mildly Bullish

Key Resistance Level (1): US$1,559.00

Key Resistance Level (2): US$1,578.00

Key Support Level (1): US$1,525.00

Key Support Level (2): US$1,510.00

READ MORE: Gold rallies as investors brace for Iran response to US attack