Gold has been back in the spotlight as of late, with the prospect of a Fed rate hike this year capping gains in the precious metal and threatening to push it back below the $1,300 level for the first time since June.
A month ago Gold was trading at just below $1,370 before falling more than 4.5% where it ran into support around $1,300, where the 89-day simple moving average intersects a prior level of support and resistance.
It then found some reprieve on Friday when the US jobs report cast further doubt on whether the central bank will raise interest rates at its next meeting this month.
Source – CME Group FedWatch Tool
It now finds itself trading within a moving average band, with the 89-day SMA offering support below and the 55-day SMA resistance above. The latter was also a key level of support for three weeks in August.
A failure to break back above the 55-DMA could see the 89-DMA once again coming under significant pressure, with a break of this level being quite a bearish signal. While Gold may find some support below here around $1,290 having done so on occasions before, the next major support level could be found around $1,250-1,260, a prior area of support and resistance.
A move above the 55-DMA could be quite a bullish signal with $1,350-1,355 being the next key level of resistance.
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