Or can gold build on its rally?
Gold fell into territory last week but since then, it appears to have found some support. Was it a false breakout or will the downtrend gather pace?
I see little reason to think that we’re seeing a resurgence in gold currently. The rebound coincided with a drop in the dollar after the US jobs report, which may have provided a convenient profit taking opportunity.
But the break below the 200/233-day gold coincided with a neckline break in the US dollar index . We may have seen a pullback in both but, equally, they are still in tact.band in
In gold , we’re now seeing a test of both the 200/233 and 55/89 bands, which coincides with some key 2021 fib levels. Unless we see these fall, gold continues to look .
We’ve already seen pushback at $1,850, the upper level of the 200/233 band and the 38.2 fib. A move above here would concern me a little but the 50 fib would then become critical. The upper part of the 55/89band and the peaks of the two recent rallies.
A failure here and the outlook starts to look very different, with the 61.8 fib and $1,900 the final hope but this may be asking a lot. Big levels will have fallen prior to this, both in gold and probably the dollar index .
A rotation off the 38.2 or 50 fibs though and this is looking like a textbookbreakout.