Weekly Support at $3,293
The interim higher swing low at $3,293 is also a weekly low and close to the previous week’s low at $3,296. Together, they identify a potential significant weekly support level. Therefore, a sustained drop below $3,293 could see a burst in momentum as the possibility of a failure of support at the 50-Day MA would increase. If a weekly breakdown occurs then there is potential support at the crossover of two trendlines, at $3,271, and an earlier higher swing low at $3,245. Alternatively, if a breakdown is followed by a quick recovery above prior lows, then that could also be a sign of an end to the pullback.
Above $3,370 Needed for Bulls
Given the current trend pattern, a decisive advance above today’s high of $3,370 would be needed for signs of strength that might be sustainable. That would also put the price of gold back above the 20-Day MA, which is now at $3,352. As noted above, the behavior of gold around the 50-Day MA, may provide clues as to what could be next. Each of the recent two tests of support at the 50-Day ended by daily closing prices above the line. There was only one day that the line was breached earlier in the trading session, and it was recovered before the close.
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