GOLD SHORT-TERM - NEUTRAL

The limited retreat this week and still-buoyant momentum suggest that gold could make one more attempt to test key resistance that has been held so far this month.

Last week, XAU/USD turned lower from near a key barrier,a bit earlier than anticipated. The converged ceiling is at 1800-1820, which includes the 200-day moving average and at least three trendline resistances – one from the end of 2021, another from July, and the third from August.

This follows a break earlier in the month above a key ceiling at the October high of 1729, confirming that downward pressure has faded for now. It is the first time since April that the yellow metal has crossed above an important pivot/price high.

Despite the recent retreat, gold has held a vital cushion – the resistance-turned-support at 1729, roughly around the 38.2% retracement of the November 3-15 rise. Given that the Moving Average Convergence Divergence (MACD) indicator is comfortably in positive territory (indicating that the trend is up), a retest of 1800-1820 can’t be ruled out.

While short-term dynamics point to a ranging scenario, it remains unclear if the rebound this month is a precursor to a reversal (of the downtrend) or a corrective rally given the steep losses this year. In the context of a multi-week picture, the trend remains down.