November 22, 2024 at 06:38AM
The supposed correction/pullback in gold sure didn’t last long. Dip buyers look to have managed to pass their first test with flying colours. Last week, gold was still in danger as it ran down to test its 100-day moving average (red line). But that proved to be where buyers draw the line, with the precious metal rebounding strongly after.
And in trading this week, gold is looking poised to make it five consecutive days with gains.
The mood is somewhat helped by a more mixed dollar but also amid ongoing geopolitical tensions and more sluggish bond yields.
Nonetheless, one can also just make out a straightforward case of this being a technical rebound upon testing a key level as outlined above.
So, what’s next for gold?
The latest bounce is now starting to run up against a couple of key levels on the chart. The 61.8 Fib retracement level at $2,693.40 is one to watch now before offers layered closer to $2,700 comes into play. And that might just halt the gold momentum we’re seeing before we get to the weekend.
What’s interesting now is that the latest bounce takes a lot away from the potential seasonal tailwind that could’ve helped to arrest any stronger correction/pullback from gold, had it continued to extend from last week. From before: Gold pullback might prove to be timely for dip buyers
This now makes it a fairly tricky proposition for gold as we look towards December and January, with prices holding closer to all-time highs again in trading this week.
This article was written by Justin Low at www.forexlive.com.
