• Gold picks up steam towards a key resistance region ahead of US Independence day

• Short-term bias is positive, but an extension above 2,352 is necessary

• ISM services PMI, ADP employment, FOMC meeting minutes on the agenda  

Gold bulls returned with stronger positive momentum on Wednesday and hit an almost two-week high of 2,287. This came after Fed chairman Powell acknowledged progress on inflation and as investors awaited a slew of US data before the 4th of July holiday break.

The precious metal rejected any declines below June’s low of 2,287 and entered a new recovery phase. With the RSI and stochastic oscillator still not in overbought territory, there is potential for more progress, but the examination of May’s resistance trendline and the 200-period SMA calls for caution.

Slightly higher, the 38.2% Fibonacci retracement of the May-June downleg and the ascending line from May at 2,348-2,352 could be a threat as well. Therefore, a decisive close above that border is expected to eliminate downside risks and prompt a swift rally towards the 50% Fibonacci mark of 2,368, where June’s aggressive bullish action peaked. Beyond that, the price could undergo another impressive bull run towards the 61.8% Fibonacci of 2,387, a break of which would positively change the short-term perspective.

In the opposite scenario, the price could seek support somewhere between 2,328 and 2,318. If there is no pivot there, a sharp decline towards the 2,295-2,300 region is possible. Another step lower and beneath June's low of 2,287 could reach April’s restrictive territory around 2,265.