Gold forms another base near the top of the range. Economists at Société Générale analyze the technical outlook for XAU/USD.
First support at $1,973
Gold recently tried to break above its multi-year consolidation, but re-entered that range after hitting $2,135 in December. Interestingly, it managed to register the highest monthly and yearly closes, which is a signal for prevalence in an uptrend. After this reintegration, gold stabilized above the 200-DMA and formed a small base.
The recent pivot low at $1,973 is crucial support. Defending this would be crucial to staving off a deeper move.
If gold settles above the top of the recent small base at $2,065, the upside move is likely to be extended. Other potential targets could be placed at $2,135 and $2,230/$2,260 projections.
