Can the recovery continue?
Gold has recovered strongly in recent weeks but it’s struggled for momentum since breaking above $1,800.
The yellow metal initially broke above here on Friday but failed to hold and gave back most of its gains to end the week below that important. This is a sign of weakness in the rally and suggested it may struggle when trading resumed this week.
While trading on Monday may have given the impression this was just a blip, as gold ended the day above $1,800, as we’ve seen today, those vulnerabilities remain as it once again plunged back below.
This leaves gold in a very strange position. It’s clearly still got plenty of support as it continues to push above the $1,800 handle but it’s having a hard time holding on and continues to be forced back. Something has to give.
At times today, it looked as though that may be a keyaround $1,780, which would have resulted in a pattern on the and a break of the rising trendline formed during its recovery in recent weeks. But that support held and the price rebounded back.
Given such a tight range and one that’s becoming smaller by the day, one of these must soon fall, at which point we may have a much clearer view on the direction of travel for gold.
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