Gold opened on Sunday at 4322/4317, a level described as first support, before moving up to 4355/4360, where price met a five-month trend line resistance. A retest of 4322/4317 followed, with the move framed as delivering 450 ticks, and the same support level was again cited as the session low before another rally of 450 ticks. Late in the evening, gold broke above 4355/4360, which was presented as a buy signal to probe the 100-day moving average at 4389.
A further break above 4394 was described as another buy signal, targeting 4421/4425, after which the metal reached 4434 overnight. The next levels in focus were the 100-day moving average zone at 4390/86 and upside targets at 4495/4500. On the downside, a move below 4382 was said to open the way to 4370/4365, with stops below 4360, while a break under that area was linked to 4340/4330 with stops below 4320.
Strategic Outlook For Derivative Traders
We advise derivative traders to remain heavily focused on buying gold on dips and breakout confirmations over the coming weeks. The recent breakout above key resistance at 4355/4360 has shifted the short-term momentum firmly back into the bulls’ favor. This bullish behavior is heavily supported by strong global demand, following a multi-year trend where central banks have consistently added hundreds of tonnes of gold to their reserves annually.
Risk Management And Key Levels
In the immediate term, we want to see gold hold the 100-day moving average between 4390 and 4386 to sustain the drive toward our next targets at 4495 and 4500. Historically, holding above this crucial moving average during major bull runs has led to rapid upward moves, much like the historic price surges seen in previous easing cycles. If we stay above this zone, traders should look to build long positions with tight risk management.
If the market experiences a temporary setback and breaks below 4382, we should prepare for a quick slide toward the buying zone at 4370/4365. For these long positions, we recommend placing protective stops just below 4360 to limit downside exposure. A deeper drop below this level will likely open up another excellent buying opportunity around the 4340/4330 range, where we advise setting stops below 4320.
