Spot Gold Forecast: Gold price rallied by a gap of $10 in early trade on Monday, driven by the geopolitical situation and fresh buying demand.
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With traders going into safe mode after Syrian rebels captured the capital Damascus and took control of the country, rising uncertainty about the near future supported the gold (XAU/USD) price.
Fresh Demand from China
Another key driver of the yellow metal this morning was fresh demand from China, as the PBOC resumed gold purchases after a six-month pause.
The technical picture on the daily chart improved (though still lacking a clear directional signal) as the price moved towards the top of the near-term range ($2666, also the 50% retracement of the $2718——$2607 bear-leg, reinforced by the 55DMA).
Gold Targets
Persistent bullish momentum and rise above 10/20DMA develops initial positive signals, which will seek confirmation on break through continuous range ceiling, opening the way for extension towards targets at $2692 (Fibo 61.8% and 76.4% respectively) and $2705 (near psychological level).
Holding and closing above broken 10DMA ($2640) to keep near-term fresh bull run intact, with larger bullish bias seen above daily cloud base ($2630).