Gold bounce stalls at short-term resistance, what’s next?

Double-bottom or double-top for gold?

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Gold has managed to pull itself higher in the past week or so, rising after testing the early March lows near $1,676 to push back to $1,750 levels yesterday.

That had a hint of a double-bottom with a technical flip potentially targeting $1,824. However, the upside move now appears to be stalling at the 18 March high near $1,755 and that is keeping a lid on gains with Treasury yields pushing higher today.

So, did the double-bottom just turn into some semblance of a double-top for gold?

Looking over to the fundamentals, ETF positioning continues to look heavy as investors are still rather disinterested in the precious metal. ETF holdings were cut for a 14th straight day yesterday – falling to its lowest since 21 May last year.

As much as the technical bounce may provide some short-term reprieve for gold, any sustained rebound requires ETF interest to be rekindled. Otherwise, I would gold’s advance to eventually run out of steam as long as investor appetite just isn’t there.

For now, it is all about the technicals. If gold can breach the 18 March high @ $1,755 then we perhaps may see a squeeze towards $1,800 and the 100-day moving average (red line) as the first leg higher in said potential correction.

But if ETF positioning continues to be trimmed, that is a hard force to fight against and gold price is likely to succumb to that and fall lower in the aftermath.

However, with yields and the dollar looking perky today, gold’s latest rebound may yet fall short at the 18 March high @ $1,755 ahead of the weekend for now.