Gold bulls dug deep once again on Tuesday to protect the all-important $1,170 level that the yellow metal has failed to close below since 18 March.
There has been many attempts in that time, most notably on 5 June, as discussed in yesterday’s analysis (Gold – Pressure Mounts on Key Support). Once again today – fourth day in six – we are seeing the bears pile the pressure on this level and as of yet, they are having no luck.
That said, there is surely only so long the bulls can continue to protect this level before that support continues to fall apart. And quite often in these circumstances, once the support goes, the move can be quite aggressive. With oscillators showing momentum not easing up, this support may be on borrowed time.
As highlighted yesterday, $1,162.79 may offer further support below here with it being the most recent low, but if it does, it could be temporary as $1,170 is a far bigger support level.
This would bring $1,142.73 – 17 March and 1 December 2014 – into play as the next notable level of support, followed by $1,147.37. As mentioned yesterday, this coincides with the conservative projection following the flag break last week.