The gold price has re-entered resistance as the US dollar falls

 

The precious metal is rising on the strength of a weaker US dollar and is approaching a prior region of support that has now turned resistance. Gold, on the other hand, will need to confirm a breach of $1,730/oz. if the outlook for the precious metal is to improve.

The US dollar is sitting on a support zone that has been holding for the previous month, forming a double-bottom pattern in the process. This technical pattern often indicates a price reversal, from bearish to bullish, but a break of the neckline, which is now at 113.85, is required to confirm this setup. A break and open below this range, on the other hand, suggests that the US dollar will re-test a prior swing high and a cluster of past lows around the 109.30 level.

Gold is still in a downtrend, with lower highs and lower lows intact. The precious metal's comeback from the double-low at $1,616/oz. has given it a little more bullish perspective, but tougher tests lay ahead. A zone of resistance formed by a preceding swing low and a cluster of, mostly failed, efforts to break higher is located at $10 above the current spot price. The early October breakout higher was swiftly reversed, and this zone has kept gold at bay for the previous 2-3 weeks. If gold can break through this level, the chart will turn positive if the previous swing low at $1,731/oz. is broken. In the present context, this may be challenging.

What do you think about gold — bullish or bearish??

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