(MENAFN- DailyFX)
Gold Technical Outlook:
- Gold reversed hard to start the week after piercing trend-line
- Trend-line is solid, as long as price stays above weekly low outlook neutral to bullish
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Gold has been extremely weak, but after the sharp reversal on Monday the outlook has turned positive in the near-term. The reversal on Monday wasn't without a level either, as it came after initially penetrating the trend-line off the March 2020 low.
The trend-line is rather significant given its inflection points are the low of a major events, the pandemic and the low of a mini flash-crash that occurred last August. With price declining through the trend-line by a meaningful amount before reversing to close the session above, it adds significant validation to its importance.
As long as price doesn't sink back below the trend-line and take out the low that was created around it at 1785, then the outlook is neutral to bullish. We may not see a rip-roaring rally, but at the least a tradeable rally looks very likely.
The 200-day moving average will be the first obstacle to overcome, and some initial volatility around it could develop. But a push above the widely-watched moving average should have gold on the move higher towards 1849 and then with some momentum we could see the March low at 1888 achieved at some point.
On the flip-side, if gold sinks below 1785/81, then look for 1752 as the next level of support. Beneath there we would be looking at 1722, and with a large decline the 2021 lows at 1678/74.
Gold (GC1!) Daily Chart
Gold Futures Chart by TradingView
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
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