- Gold trades 0.29% higher after the recent price drop.
- There are some key resistance levels above that look strong.
Gold 4-hour chart
Gold has been moving in a downward trajectory since the greenback strength kicked in on 1st September. Since then, the greenback has broken out of consolidation zones in EUR/USD and most of the other majors. The market was looking towards the Fed to see if they would add to their stimulus programs but they have been deflecting the pressure over to the White House who continues to stall on a fiscal deal.
The price has broken out of some key support zones to the downside. The black level at USD 1912.55 per troy ounce is the main level to look out for. If this correction moves higher the aforementioned price level could be very important. Before that, the red level just above USD 1880 per ounce could be a stalling point but we must wait to see how the price reacts at the level.
The indicators are still bearish. The MACD histogram is red and the signal lines are still under the zero level. The Relative Strength Index is very depressed and is hugging the oversold area.
Longer-term this trend could still be an uptrend (weekly and monthly timeframes) but at the moment traders and investors are looking to time the retracement. It is very hard to catch a falling knife and predict how far these moves will last but keep an eye on the resistance zones and this retracement could move further.