Gold rose about 1.5% on Tuesday, as new signs of diplomatic action to calm the US-Iran war calmed inflation risks and is expected to ease pressure on the US Central Bank.
The rapid change in sentiment has made the yellow metal more attractive to investors, with the recent bounce from a very large $4,000 support area (which contained several attacks in the past month) having so far rebounded 50% from $4,203/$3,960 and mitigated immediate downside risks.
An improving technical picture (the price broke above the 10 and 20 DMA ($4,050 and $4,062 respectively and 14-day momentum rose into positive territory) supports the move, although the recent gains are still not enough to generate a signal for a trend change.
The price may extend its gains if favorable fundamentals continue, with a breakout of $4110 (Fib 61.8%) and $4145 (Fib 76.4%) further consolidating the near-term structure and exposing the upper breakout point at $4203 (near-term recovery high/range cap) being violated to generate an initial reversal signal.
Accuracy: 4085; 4110; 4145; 4203
sip: 4050; 4017; 4000; 3960
