Gold defends the 1305 USD/oz but the style is not very convincing though

May is super interesting for the Gold. At the very beginning of the month, the precious metal reached a super important support around the 1305 USD/oz (blue). That level is on our radar since the October 2017 but plays an absolutely crucial role since the first days of 2018. So far, its saved the bullish sentiment five times and still counting.

The previous defenses were very clean. The style of the bounce of the last one is very questionable. The price bounced from the area around the 1305 USD/oz (blue) but we can see that it was not so smooth as during the previous four times. That can show us that there is something wrong with the demand and that we may have another drop soon. What is more, the price so far failed to break the local resistance on the 1322 USD/oz (green) and as long as we are below, we cannot fully state that there is a buy signal. For that, we need to see the breakout of the green line and as for now, we need to stay a bit suspicious about the further upswing.

In the short-term, the positive sentiment is supported by the purple area around the 1318 USD/oz. As long, as the price holds above that level, we may be optimistic about, at least, another test of the 1322 area. Possible rise on Gold can be also supported by the weaker USD and we do have some signs of that on both: the EURUSD and the Dollar Index.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis