- Gold is 0.19% lower on Wednesday but the USD 1700 level has stemmed losses.
- There is a technical indication that a short term pullback is on the horizon.
Gold 4-hour chart
Gold has been moving lower in recent sessions as the risk-on environment gathers momentum. Yesterday the companies worst-hit by COVID-19 recovered somewhat as airlines/travel and banks outperformed even the tech sector. This shows that the bounce-back might be becoming more broad-based. This had negative connotations for the safe-havens including gold which moved even further into the red and on Wednesday the precious metal attacked USD 1700 per troy ounce.
Looking closer at the chart, the price has bounced off the aforementioned USD 1700 level. This level also matches up quite nicely with the 23.6% Fibonacci zone. The good news does not stop there as the Relative Strength Index (RSI) indicator also moved into an oversold area. The price waves have made a few wave lows now but in comparison to some of the prior ones, the RSI does not warrant being in oversold territory. This is called a bullish failure swing and is considered a positive sign. This does not always indicate that the trend will move back higher but it might offer a short term reprieve.
The next resistance is the wave low from the first lower high lower low pattern at USD 1739.04. If this levels (marked in red) is breached to the upside then the uptrend might be back on. If it is rejected then the price could move to lower levels and a decent support level is the 38.2% Fibonacci zone.
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Additional levels
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