Gold Price Analysis: $1744.75 is becoming an increasingly important resistance zone
- Gold is trading just 0.22% higher on Tuesday despite some negative news.
- The 55 and 200 moving averages are providing a cluster of support.
Gold 4-hour chart
There is a strong argument that gold should be trading much higher than where it is today. Considering the recent developments in the fundamental picture gold feels like it has been slow to react. On Tuesday there has been the news that Beijing has moved into lockdown again due to a second COVID-19 wave. India and China have been fighting at their border with India confirming 20 soldiers were killed. Lastly, the coronavirus cases in some of the main US states are rising again and Arizona posted a daily case rise of 6.5%.
Looking at the chart now the price has moved higher which can be seen in the last 4-hour candle. The candle before also seemed to have rejected the moving averages and popped back up. On the upside, the key levels to look out for are the black downward sloping trendline but more importantly USD 1744.75 per troy ounce.
The technical indicators are starting to look more positive too. The MACD histogram bars are getting shallower but are still in the red and the signal lines are looking higher again. The Relative Strength Index indicator has moved above 50 once again and there is lots of room to manoeuvre on the upside.
In terms of support levels, the psychological USD 1700 per troy ounce level is important but the key support level is the wave low of USD 1704.28 per troy ounce. If this gets broken a new lower high lower low pattern has been created and this could indicate lower prices are to come.
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Additional levels
Author
Rajan Dhall, MSTA
FX Daily
Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.
