Gold – Holding gains but a few big tests lie above

  • Stalling at $1,960
  • Key fib levels remain a big test

Gold is also trading marginally higher today and struggling around a notable resistance level, $1,960.

It broke through $1,940 yesterday on the back of the inflation numbers and has now entered retracement territory where a few key levels will be put to the test.

From a technical standpoint, those are the 38.2%, 50%, and 61.8% Fibonacci retracement levels – May highs to June lows – which happen to fall around $1,960, $1,980, and $2,000, respectively.

Gold Daily

Source – OANDA on Trading View

A break of these may indicate that gold is back in bullish territory, although the price may face some resistance in the interim.

A look at the 4-hour chart supports the more bullish view in gold but there is scope for corrective moves along the way. We’ve seen some consolidation since breaking $1,940 – which also saw the price break above the 200/233-period simple moving average band. Price has been quite responsive to this in the past.

If the price does pull back a little, it will be interesting to see whether it tests $1,940 from above, with a rotation off here viewed to be confirmation of the initial breakout and a bullish signal. Especially with it coinciding with that SMA band.

Gold 4-Hour

Source – OANDA on Trading View

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
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