Gold falls back below $2,000 to start the day, what levels to look out for?
Gold tracked higher in trading yesterday to a high of $2,015 before seeing a brief and quick dip to a low of $1,976, but buyers managed to defend the drop by holding on to the 200-hour MA (blue line) before resuming a slight climb.
But the sudden dip sort of hit confidence in gold a little as we see price action consolidate around $2,000 thereafter before falling back below the key level to start the day.
That said, buyers are still in near-term control as long as they can keep above the 200-hour MA @ $1,979.24. That will be the key spot to watch in the sessions ahead, in case sellers start to go in search of any further downside momentum.
As for buyers, getting back above $2,000 will be the first key challenge before looking to test the high yesterday @ $2,015.
Despite the dollar being mildly weaker in trading today, gold isn't really reacting to that and I fear that if price action lingers in and around $2,000 for too long, there could be further signs of exhaustion in the short-term.
But dip buyers have certainly proven their resilience over the past week, so it is hard to also discount a continued rebound considering that the fundamentals and flows are also still working in gold's favour in the bigger picture.
That said, I would argue that dip buyers would definitely see the situation more attractive should there be larger pullbacks towards $1,900 or lower in that regard.
Moving forward, if buyers can keep consistently keep above $2,000 and look towards fresh all-time highs once again, perhaps it can open up a new range to look at.
