by Nick Simpson, Forex fx4x
Gold (XAUUSD) found support on the 12th July at the ascending trend line level we have been monitoring this past week. Price on the daily chart (as shown below) is now near to closing out the day as a doji candle or similar, signalling market indecision towards pricing of the precious metal.
Upside potential resistance levels include the 20 day SMA (simple moving average), around the 1590 area, and the 1600 level; 1600 has acted as a price pivot when referencing the daily time frame chart.
Potential support levels include the 1550 area which previously experienced demand on the 29th June. However, any close below this level would be a close under the trend line level and add bearish weight from a technical perspective. Should price move below this level the 1527, 16th May daily low, area is a key technical level for gold.
The price of gold (XAUUSD) closed the week at the daily 20 SMA level as referenced above, just under the 1590 level. The trend line support area proved to be a strong technical level. Note: Friday trading is not included in the chart below.
The SPDR gold trust (NYSE:GLD) closed the day 0.26% down at $152.59. When referencing other commodities we note that oil pared earlier loses after spending the majority of the trading session under the hammer, and struggling to hold above $85 a barrel; this came on broad based dollar strength.
The turn around seen in commodities is not overly convincing in terms of a credible trend reversal but may see gold test the 1600 level or thereabouts. Fundamentals can rapidly change but on current sentiment a break below trend line support does not look unlikely. A sustained move below 1530 would be a constructive technical development but gold bulls may be waiting on the sidelines ready to once again buy gold around the longer term demand zone.
Gold XAUUSD Daily Chart