Tuesday, 23 July 2019 02:51 GMT

Gold Price Outlook: Gold Snaps Back from Highs, Support in Sight

(MENAFN - DailyFX) Gold Price Outlook Talking Points: Gold priceshave finally found some resistance that could pose pause in the bullish move, following theprint of fresh six-year-highs during yesterday's trade . The big question now is for how long this pullback might last or whether a deeper bearish move might be in order afteryesterday's Powell commentssounded less-dovish than theFOMCrate decision a week ago. A couple of key areas of potential support are identified below. Gold Prices Run into Resistance

The bullish trend in Gold has finally found some resistancethat could hold buyers at bay, putting at least a pause on what's become an aggressively strong month of price action in the yellow metal. Gold prices spent much of the prior three months in consolidation;highlighting breakout potential in early-Mayandagain later in the month . That allowed for an aggressive breakout to take place that saw Gold prices surge up to fresh six-year-highs, setting a fresh high watermark during yesterday's trade just shy of the 1440 handle.

Resistance is playing in off of a longer-term zone that connects the 50% marker of the 2012-2015 major move to the prior six-year-high at 1433.85.

Gold Weekly Price ChartGold price weekly chart

Chart prepared byJames Stanley

Going down to the daily chart highlights bearish reversal potential. Gold prices put in a day of indecision during yesterday's trade after that fresh-high came into play. With sellers making a run as follow-up to yesterday's indecision, the potential is there for the build of an evening star pattern. Such a formation will often be approached with the aim of a bearish reversal, particularly when a prior top-side trend had moved into overbought status.That happened weeks ago in Gold but buyers continued to push ; making this an item of interest for traders on either side of Gold prices. For those looking at short-side stances, completion of this formation may open the door for a larger reversal. For those continuing to employ bullish strategies, letting this pullback play-out until support might come into play could re-open the door for bullish continuation strategies.

Gold Price Daily Chartgold price daily chart

Chart prepared byJames Stanley

Gold Price Next Support Potential

There are a variety of levels underneath current prices that can function as either targets for short-side approaches or support potential for those looking to get long. Given how stretched that prior move had become, finding recent historical levels of note could be of challenge. But, the 2014 swing-high at 1392 could function as such, and a bit-lower at 1375.15 is the 2016 swing-high, and this is confluent with the 38.2% Fibonacci retracement of the most recent advance.

Below that, another confluent zone of interest shows around the 1350-level, as there's both the 50% marker of the recent trend to go alongwith a prior swing-high that showed around the bearish trend-line projection of the longer-term symmetrical wedge pattern . Ifprice actionposes a break below that zone in short-order, then something in the backdrop has likely shifted and the bullish approach will likely need to come into question.

For bulls that want to remain aggressive – watch the 1400 level today, as this is the 23.6% retracement of that recent major move; and if buyers can hold the line of support here, the bullish theme remains in full view.

Gold Price Four-Hour Chartgold price four hour chart

Chart prepared byJames Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? OurDailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources onGoldorUSD -pairs such asEUR/USD ,GBP/USD ,USD/JPY ,AUD/USD . Traders can also stay up with near-term positioning via ourIG Client Sentiment Indicator .

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, ourIG Client Sentimentshows the positioning of retail traders with actual live trades and positions. Ourtrading guidesbring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and ourreal-time news feedhas intra-day interactions from the DailyFX team. And if you're looking for real-time analysis, ourDailyFX Webinarsoffer numerous sessions each week in which you can see how and why we're looking at what we're looking at.

If you're looking for educational information, ourNew to FX guideis there to help new(er) traders while ourTraits of Successful Traders researchis built to help sharpen the skill set by focusing on risk and trade management.

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter:@JStanleyFX



Gold Price Outlook: Gold Snaps Back from Highs, Support in Sight

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