Gold confined in a narrow trading range

Holding its near-term trading range, Gold managed to recover from an early dip to 50-day SMA support, on the back of improving investor risk appetite, and has now turned flat.

Currently trading around $1337, the precious metal continued with its near-term consolidation phase for the fourth consecutive session. Despite of last week's strong gains led by disappointment from the Federal Reserve's monetary policy stance, the yellow metal has failed to attract any follow through buying interest and has been confined within a 4-day old trading range above 50-day SMA. 

With a relatively thin US economic docket, featuring the release of CB Consumer Confidence index for September, the commodity would continue to take clues from the prevalent sentiment surrounding riskier assets - like equities.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com, notes, "with the stochastics beginning to turn will lead us lower and we should then break below 1333/31 and head for 1326/24....This is good intra day support therefore any shorts to be covered...We attempt very small longs, but be aware that there is scope as we are in this oscillating sideways range that we will head lower and test the 1310 support once more...."

She further adds, "If we do continue to see range trading then we should ease the overbought conditions and leave Gold ripe to make further gains and a break of 1345 would then lead us higher to 1351/55...Cover longs...we only go back into longs above 1355 for 1361....."

"SUPPORT   1333  1326/24   1318   1310     1304   1298   1295
RESISTANCE 1344/45   1351   1355   1361   1372   1375   1381    1389"