Gold showed a strong recovery after its early April decline, maintaining support near $3135. Despite overbought indicators, momentum persists, aiming for targets at $3290 and then $3345/3370.
Following a dip at the start of April, gold dropped towards the 50-DMA, hitting a low around $2955 before bouncing back. Current daily MACD levels indicate a strong movement with no immediate signs of a downtrend.
Support Levels And Targets
The area around $3135/3128 serves as the first layer of support, and holding this may sustain the upward movement. The subsequent targets are projected at $3290 and further at $3345/3370.
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We’ve seen gold reclaim strength with striking resilience, shrugging off the weakness earlier in April. The bounce from just under $2960, closely aligned with the 50-day moving average, has been firm, suggesting persistent interest from both momentum-driven and directional flows. It’s notable how price action has shifted, despite indicators showing stretched conditions by traditional measures such as RSI.
Momentum Indicators And Potential Pullbacks
Momentum indicators, particularly daily MACD, are printing wider positive histogram bars — a sign that current buying effort has not yet exhausted. No negative crossover has developed, reaffirming that trend-following participants still have reason to remain engaged. This doesn’t mean a pullback isn’t possible, but rather, any pause so far has been met with responsive buying.
Key support in the $3135–$3128 area needs to do its job. As long as that zone remains intact, the door stays open for further extension. Market positioning seems to favour a continuation — likely pushed toward first resistance near $3290. Beyond that, cluster zones near $3345 and ultimately $3370 could be tested if follow-through holds. Those upper targets don’t appear out of reach, judging by the pace of recent movement.
Options markets have reflected this persistent strength as well. Implied volatility in front-month calls has lifted, not necessarily from fear, but rather perhaps a reflection of increased directional conviction. The rise in open interest on the call side confirms that positioning is leaning into further strength.
We need to watch flows carefully now. Those holding shorter-dated derivatives, particularly call spreads, might consider if their strikes are positioned above those resistance targets, or if early profit-taking triggers unwind risks. Likewise, for volatility sellers who’ve sold into recent strength, re-marking positions against new IV regimes must be ongoing — particularly if gold trades into the higher end of its price channel.
If trades are based on trend continuation strategies like momentum entry or breakout confirmation, reacting to a sustained daily close above $3290 could be reasonable. Not based on guesswork, but simply following the current structure. Those focused on mean-reversion might need further confirmation — a stall or failed push above indicated levels — before setups become valid again.
In situations like this, where strength is clear and technical rejection is absent, we often reassess risk/reward boundaries by shortening validation windows and managing upside exposure accordingly. A failure to hold that $3135 floor would, however, challenge ongoing strength and force a review of bullish bias versus corrective retest potential. That level acts as more than just a line in the sand — it anchors many week-long extensions and may guide short-dated option expiry behaviour.
We’ll keep watching momentum indicators, topside volume expansion, and any rising correlation with inflation hedges. These details give insight not only into direction but also into sustainability of the current push. Traders should remain precise: define risk, avoid over-leverage, and resist entering on lag alone without setup alignment.
