Gold recovers some ground as the dollar slips to start the session
Gold is up by 1% to start the day after a bit of a setback yesterday as it fell alongside stocks/risk. The drop saw sellers take near-term control but buyers managed to put up a defense at the 61.8 retracement level @ $1,876.45.
And as the dollar eases to start the session, gold buyers are seizing the opportunity to move above the 200-hour MA (blue line) to establish a more neutral near-term bias now.
That puts some focus back on the $1,900 level with the 100-hour MA (red line) seen not far away @ $1,902.02 currently.
That will be the key near-term upside levels to watch for gold in the session ahead. Break above that and the near-term bias turns more bullish instead.
For gold, the short-term implications are a key focus at the moment. The drop in the latter stages of September saw a test of its 100-day moving average and technically, price is still hovering close to key support around $1,850.
While gold’s long-term fundamentals may still be rosy, the near-term focus on stimulus talks and risk could have more severe consequences for gold if it leads to a break below its 100-day moving average (now @ $1,858.96) and the $1,850 level.
The next two months is going to be tricky for gold to navigate but if buyers can steer clear of any major disaster, that may set up a potential for a test of $2,000 from the usual late December and January seasonal demand ahead of the Lunar New year.
But let’s not get ahead of ourselves. Baby steps, as the near-term bias is more neutral. For now, buyers will need to try and work their way back above $1,900. As for sellers, it is all about trying to attempt to break the key support levels mentioned above.