Gold price is hovering above $1,795 during the sluggish trading session. Accordingly, the precious metal is showing slight gains in a bearish chart formation. Analysts are looking for direction clues from the drawing of gold.
More stringent data needed to recall gold sellers
cryptocoin.com As you can follow, the bears are breathing a little after the two-day downtrend of gold. In this environment, gold continues its moderate course. Still, mixed catalysts are pushing metal buyers into consolidation, the biggest daily drop in more than a week.
However, the optimism surrounding China’s pro-growth policies and Sino-American struggles have been at odds lately. This puts gold traders to the test. The cautious sentiment may also be linked to the recently strengthened US GDP and CB Consumer Confidence figures. Because they contributed to the renewal of the hawkish Fed bets. But the Fed hasn’t been very convincing for the gold bulls at its last monetary policy meeting. As a result, tighter outputs of programmed data become necessary to recall gold dealers.
Gold price technical analysis
Market analyst Anil Panchal analyzes the technical outlook for gold as follows. Gold price remains on the defensive after bouncing off the bottom line of a one-month rising wedge bearish chart pattern. It is possible to attribute the yellow metal’s most recent volatility to the stagnant MACD and the lower top of the RSI (14) despite gold’s December upward move.
All in all, gold’s recovery is likely to be difficult unless it challenges the ascending wedge formation by crossing the upper line of the pattern currently near $1,830. Following this, a rise towards the June peak of $1,880 cannot be ruled out. It is worth noting that the bottom of many hurdles near $1,800 and $1,810 is testing close recovery moves.
Alternatively, a downside break of the indicated wedge support line at the latest near $1,788 would confirm the theoretical drop targeting $1,690. However, it is possible that the 21-DMA level and the October high near $1,785 and $1,730, respectively, will challenge the golden bears during the anticipated decline.
Technical analysis of gold prices on charts
Technical analyst Ross J Burland draws the technical picture of gold as follows. Gold bulls need to commit at major trendline support, Gold price found demand in that support area. It has also realigned with the broader uptrend. Gold price found support from inflation data that cooled in Friday’s data storm. Thus, it rose on the Friday before the Christmas holiday and the long weekend.
In the previous analysis, the gold price fell into the targeted region. It surpassed that in a 300% measured move to $1,784. In line with this, the previous micro trend started at this point:
Respecting the bullish trend, it is worth noting that a correction in the gold price is possible.
Gold price aligned with the coil. So it’s possible that it will continue higher, or at least stay horizontal. Otherwise, an even deeper move in the gold price will be on the cards in the coming days. Also, the case for a significant downside correction with the eye of $1,775 will emerge.
Important levels to watch for gold price
Market analyst Anil Panchal identifies critical levels for gold on the Technical Confluence Detector (TCD). TCD shows that gold price is fluctuating above the strong support area surrounding $1,793 which includes 23.6% Fibonacci daily and 38.2% weekly, not forgetting the 100-SMA at 4H and 10-HMA.
If the gold price drops below the $1,793 support, the previous month high of $1,788 is likely to test the bears. Following that, 23.6% Fibonacci weekly and Bollinger’s middle band on 1D, around $1,785, will likely act as an extra downward filter.
Gold’s weakness above $1,785 is likely to drop to $1,775, the previous week’s low. On the other hand, it is possible for Fibonacci’s 38.2% daily convergence of 200-HMA to test gold buyers at $1,800. Also, at 4H, Bollinger’s daily and middle band Fibonacci 61.8% near $1,808 and Pivot Point R1 near $1,815 are acting as an upside filter.