Aug high provides strong support for gold

In the beginning of Tuesday the yellow metal was actively testing the Aug high at 1,170, while a decline below this mark could expose the next demand as low as 1,155. However, the bullion revived later in the day to show confident gains up to the 200-day SMA at 1,175. Any movements around the long term moving average are important; however, we should observe a climb beyond 1,181 (monthly R2) in order to rehabilitate bullish expectations. A bounce back is therefore not completely off the table at the moment.

SWFX market sentiment with respect to the precious metal remained broadly unchanged for the past three weeks. Yesterday the bullish share added just one percentage point to 52%, but an advantage remains very negligible right now.