Gold analysis: Passes below support zone
|The yellow metal's price became highly volatile and eventually passed below the support zone of 1,778.60/1,782.70, which kept the rate up since November 23. The high volatility was fueled by the US Federal Reserve Chairman Jerome Powell giving a testimony to the US Senate.
Despite the passing below the support zone, the price for gold recovered above the zone and resumed to use it as support at the start of Wednesday's US trading. Meanwhile, the recent volatility revealed a channel down pattern, which appears to have guided the price since November 24.
In the case of the bullion's price surging, it would have to pass the 50 and 100-hour simple moving averages near 1,790.00. Afterwards, the 1,800.00 mark might act as resistance. Above the 1,800.00 level, the 200-hour SMA and the upper trend line of the channel down pattern could keep the metal down.
On the other hand, a decline is highly likely going to find support in the 1,778.60/1,782.70 zone. Below the zone, round price levels could act as support until the price reaches the lower trend line of the channel down pattern.
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