Gold hangs on to key support level, but buyers have a lot to do still

Technical Analysis

Author: Justin Low | gold

Gold continues to cling on to key support level

Support in the form of the 61.8 retracement level @ $1,286.06 is helping to stall declines for the past few days and with gold trading lower again this level will be the one to watch for once again in trading today.

While buyers are managing to stall the decline, sellers are still in control of price action even on the near-term chart.

The hourly chart still shows that price is unable to move back above the 100 and 200-hour MAs and that leaves a bearish bias in gold still in tact.

And for buyers, this is where the hard part is really at. The first move is to break above the 100-hour MA (red line) @ $1,293.43 and that will only help to begin the process of establishing a bullish bias back in the commodity in the near-term.

Thereafter, there is a confluence of resistance levels sitting nearby at $1,300 and just above. First is the $1,300 figure level itself and the 50.0 retracement on the daily chart @ $1,301.35. That will be followed up by resistance in the form of the 200-hour MA (blue line) @ $1,305.24 and the 200-day MA @ $1,307.37.

Those are all important levels for buyers to clear in order to establish a bullish bias back in gold. And for now, that is a tall ask considering the dollar's solid performance so far today.

While the downside move has so far stalled - some encouragement in that - there is still a lot of work to be done for buyers to sustain a bounce back to the upside.


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