- The 20-day moving average (MA) continues to cap upside in the yellow metal.
- A key descending trendline has been breached.
Gold (XAU/USD) failed to take out the descending (bearish) 20-day MA yesterday and was last seen trading largely unchanged on the day at $1,297.
The moving average has played a spoilsport since mid-May and proved a tough nut to crack even during the last week’s Italy-led risk aversion in the financial markets.
However, the yellow metal breached the falling trendline (drawn from the April 11 high and May 11 high) yesterday, so a convincing break above the 20-day MA could be on the cards. Currently, the moving average is located at $1,300.
The action in the related markets – USD, treasuries, and equities, seem to have little or no influence on the yellow metal, so focus is on the technical factors mentioned above.
Gold Technical Levels
Resistance: $1,300 (20-day MA), $1,308 (200-day MA), $1,325 (May 11 high).
Support: $1,288 (June 1 low), $1,282 (May 21 low), $1,260 (Oct. 6 low).
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