Technical Analysis – Gold bounces off 50-day SMA
Gold was retreating from its all-time high
But the 50-day SMA prevented further declines
Despite latest weakness, oscillators remain neutral-to-positive
Gold had been in a strong uptrend since late May, which led to a fresh all-time high of 2,483 on July 17. Although bullion has been experiencing a significant pullback since then, the 50-day simple moving average (SMA) seems to be capping its downside for now.
Should the recent bounce off the 50-day SMA turn into a rebound, immediate resistance could be found at the April high of 2,430. Conquering this barricade, the bulls may attack the May high of 2,450. A violation of that zone could pave the way for the recent record peak of 2,483.
On the flipside, if gold reverses back lower, the previous resistance zone of 2,368 could act as the first line of defence. Failing to halt there, the price could descend towards the recent support of 2,353, which lies very close to the 50-day SMA. Further declines could then stall at 2,317, a region that provided downside protection both in June and July.
In brief, gold has come under significant selling pressure following its trip to a fresh all-time high. However, it’s too early to call for a sustained correction, especially as long as the 50-day SMA holds its ground.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
