Gold defends the post-Fed rally around a two-week high, also keeping the upside break of the 100-SMA level of $1,725 and the previous resistance line, now support around $1,721. The upside momentum also takes clues from the bullish MACD and RSI signals, not to forget Fed-inspired USD weakness to direct the buyers towards July 08 high near $1,753. Following that, $1,773 and $1,783 may entertain the bulls before directing them to the 78.6% Fibonacci retracement of the June 17 to July 21 downturn, near $1,820.
Alternatively, pullback moves may initial aim for the 100-SMA level near $1,725 before challenging the resistance-turned-support of $1,721. However, a fortnight-old horizontal support zone, near $1,699-94, appears a tough nut to crack for metal sellers. Given the bearish MACD signals and the downbeat RSI, not to forget the Fed-led firmer USD, the precious metal is likely to decline further. That said, the yearly low of around $1,680 could offer an intermediate halt during the south run targeting the 61.8% Fibonacci Expansion (FE) of $1,655.
