Gold approaches 3 month high recovery at a critical juncture
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. […]
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.
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.
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