Market news

10 May 2021

Gold bulls come out of the shadows to mull a test of $1850 - DBS Bank

FXStreet reports that Benjamin Wong, Strategist at DBS Bank, notes that gold is at its best levels in six months as prices recover from March’s $1676 lows. The recovery is mindful of the strong confluence support zone of $1660-$1670 (April-June 2020 price congestion zones). With a near-term bullish double-bottom pattern evolving into another bullish pattern of a reverse head-and-shoulders, the onus is to buy tactical dips that would eye a sustained break of the 200-day moving average of $1850.

“It would take two hands to clap in unison for gold to stage further advances, beyond its current best showing in six months. Spot gold prices need to surmount the 200-DMA at $1850, and gold exchange-traded funds prices (GLD US) need to tick above the dropped down resistance line from last August’s 194 that would obliterate the key moving average resistance at 174.” 

“With a near-term resistance line that trails from $1874 easily taken out, it should imply that gold remains a buy-on-dips proposition, with the support pivot at $1798 worthy of a look.”

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