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Gold – Support Holds But Pressure Remains

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.

Gold 4hr [1]

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 [2]). 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 [2], $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 [2], this coincides with the conservative projection following the flag break last week.

Gold daily

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam [6]

Senior Market Analyst, UK & EMEA at OANDA [7]
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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