Gold price remains depressed below $2,500 amid stronger USD, downside seems limited
Technical Outlook: Gold price might continue to find decent support near the $2,470 horizontal zone
From a technical perspective, the Gold price has been oscillating in a familiar range over the past three weeks or so. This constitutes the formation of a rectangle on short-term charts and points to indecision among traders over the next leg of a directional move. The range-bound price action, however, might still be categorized as a bullish consolidation phase against the backdrop of a strong rally to the all-time peak. Moreover, oscillators on the daily chart – though have been losing traction – are still holding in the positive territory. Hence, any subsequent slide might still be seen as a buying opportunity near the $2,471-2,470 horizontal support.
The latter marks the lower boundary of the trading range and should act as a key pivotal point. A convincing break below might prompt some technical selling and expose the 50-day Simple Moving Average (SMA) support, currently pegged near the $2,443-2,442 region. The downward trajectory could extend further towards the $2,400 round-figure mark en route to the 100-day SMA, around the $2,390-2,389 zone. On the flip side, any meaningful move up now seems to confront stiff resistance near the $2,520 region ahead of the $2,530-2,532 area, or the all-time peak. Some follow-through buying will be seen as a fresh trigger for bullish traders and set the stage for a further near-term appreciating move.
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