Heads up, gold bugs!
The precious metal is back in correction mode again, so I wouldn’t want to miss this opportunity to catch the trend.
Here are the levels I’m watching.
Gold (XAU/USD): Daily
Gold (XAU/USD) Daily Chart
Risk assets are popping higher recently, but can these rallies last?
Gold is still within the correction zone seen on its longer-term time frames, as the commodity is cruising inside a descending channel on the daily chart.
Price looks ready to test the channel resistance, which happens to be right smack in line with the 50% Fibonacci retracement level around $1,715.Now there’s a good chance the ceiling could hold again and send the precious metal back on its downtrend. That’s based on the 100 SMA being below the 200 SMA, reflecting the presence of bearish vibes.
Stochastic has a bit of room to climb, though, so buyers might still have some energy left. When the oscillator turns down from the overbought area, this could confirm that sellers are returning.
If the resistance levels hold, gold could set its sights back on the swing low at $1,615 or lower. Better keep your eyes peeled for reversal candlesticks at the area of interest or at the 61.8% Fib closer to $1,750.
Aside from that, stay on the lookout for any changes in market sentiment that could spur another decline in commodities. We’ve got a few top-tier data releases this week, plus some major headlines reviving geopolitical tensions!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.
