Gold price action of late has mostly been just below the $2,400 mark. Buyers attempted to firmly break through the key level, but ultimately failed to maintain a daily close above this level. The ambient music has also been favored by recent geopolitical tensions between Israel and Iran. But as these fears subside a bit, we see a pullback in gold. But has this changed the recent dynamic?
Gold Hourly Chart (XAU/USD)
Well, if you follow the hourly chart, it might suggest a change in fortune. This is at least in the short term for the evolution of the price of gold. During this month’s rally, the price was largely defended by the major hourly moving averages. If not at the 100 hour moving average (red line), then at least at the 200 hour moving average (blue line).
This helped keep buyers in balance, but we are now seeing these key short-term levels weakening in today’s trading.
The price has now fallen to $2,360 and is trading below the two key levels, suggesting that the short-term bias has become more bearish. I would still focus on minor support around $2,320-25, but if that gives way, we could then look at a quick retracement to $2,200 for gold.
The structural view, however, indicates that there is still plenty of upside potential for gold. I mean, this rise comes despite markets having significantly backed away from their bets on a rate cut. So if it starts to come back, there will definitely be fuel to add to the fire of gold as a whole.
But just as stocks have pulled back slightly after big gains since last November, gold could also lag behind at some point.
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