Or could we finally see a bearish breakout?
The recent rally in gold appeared to be building momentum but just as it did, it ran into firm resistance around $2,000 and it’s been downhill since then.
The yellow metal may have been supported by higher inflation expectations but yields have continued to rise as traders price in more rate hikes on the back of some very hawkish Fed commentary.
Since falling just short of a major breakout, the price has been falling but could things start to look up again? We may know soon, with gold about to test key support.
The first test falls around $1,925 where the 50 fib coincides with the 55-day SMA. Below here, the 61.8 fib coincides with the 89-day SMA which could pose a further test of support.
Ultimately, this region is a big zone of support, a break of which could be a very bearish signal. Whatever the specific rotation point, a rebound around this area could suggest there are further rallies to come.
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