Gold: Will the bulls take over again?
The gold price has bounced off the upper resistance level at US$1341 and corrected since the beginning of the month. The level of US$1280 provided support for the precious metal for the time being, and a short recovery from the downward movement followed. The question now is whether it’s time for the bulls to take over the market again, or whether the bears will do a second dance.
The 38- and 50-day smoothing lines are still parallel with some distance between them. On the first move down, the market ignored the two lines moving straight through them. However, the last upward correction came to an end at the 38-day smoothing.
The MACD is below its trigger line. The histogram is negative but with a fragile tendency to cross the zero line. This could be the first sign of further short-term recovery.
On the way up, the market must first cross the critical zone between US$1313 and US$1322 to reach the old highs of US$1352. These could provide resistance on the way to further rising prices. Only a sustained breakthrough could open the way to the next resistance zone at US$1366.
However, if the bears take back the market, the first support could be in the known range of US$1281. If the price drop continues, further support at US$1256 could be possible. If the market falls through here as well, the picture could become gloomier, and a new valuation will be needed.
Gold Daily Chart | Source: ActivTrader
Written by Daniel Schuetz, External Analyst
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