The gold price has started the new week in the green after the reversal seen last week.
The correction came after days of gains, just as bullion was approaching an all-time high at $2,070. The bearish impulse was mostly due to the rebound of the dollar index. Moreover, a modest recovery of US Treasury yields, after some hawkish comments from Fed board member Waller, was another catalyst for the decline of gold.
However, the retracement seen on Friday cannot yet be seen as a proper inversion. After weeks of gains, it appears that a pullback to the key level of $2,000, is a pause which has a good chance of helping bullion to consolidate after the recent rally, finding new fuel for another bullish movement and re-starting its journey to $2,075.
Of course, this theory should be confirmed in the next few trading days. But what we have seen in today’s early trading seems to support this, with both gold spot and futures prices traded above $2,000.
From a technical perspective, the area between $1,980 and $2,000 is the first valid support zone for bullion, while the next key levels to be monitored are $1,950 and $1,920. In the bullish scenario, the first key resistances are placed between $2,060 and 2,075, on the all-time high of gold.
With a credential background in Economic Finance and International Exchange (MA), his critical analysis of gold and silver markets’ performance is frequently quoted by leading publications, week on week.
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