Gold approaches 3-month high – recovery at a critical juncture

<p>Gold approached a three-month intraday high around 1169 on Monday as the US dollar remained weak on continued speculation over a delayed Fed rate hike. […]</p>

Gold approached a three-month intraday high around 1169 on Monday as the US dollar remained weak on continued speculation over a delayed Fed rate hike.

For more than a week, the precious metal has risen from its recent depths near the 1100 level. This rise formed a bounce off a clear uptrend support line extending back to the recent five-year low of 1077 in late July.

In the process of this past week’s rebound, gold has risen above its 50-day moving average, the key 1140 support/resistance level, and most recently, its 200-day moving average.

Gold Daily Chart


Currently, the price of gold has reached up to a critical resistance juncture. The 1170 level is a major resistance level that was last tested in late August. Prior to August, this 1170 level served as support on multiple occasions. Also helping to reinforce this resistance is the noted 200-day moving average, which is just below the 1170 level.

Despite the current attempt at recovery, gold remains entrenched in a long-term downtrend extending all the way back to 2011.

In the short-term, a major technical test for the precious metal will be whether or not it is able to rise above 1170. In the event of a breakout above 1170, the next major upside target is around the 1200 psychological resistance level.

If gold is unable to reach and breach the current resistance, the key downside target in the short-term continues to reside around the 1100 support level.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.