Gold Price Bounces Off Support, Upside Favored
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Gold price, news and analysis:
- The gold price has traded within a downward sloping channel since mid-April.
- Having bounced from support at the lower boundary, it could be heading towards resistance at the upper boundary.
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Gold price rally in focus
The price of gold has singularly failed to benefit from the recent “risk off” tone in the markets. Despite its traditional role as a “safe haven” it has been falling steadily since mid-April even though fears of a trade war between the US and other nations have led to a broad flight to quality.
Now, though, that could be about to change. Over the last few trading sessions it has repeatedly failed to fall below trendline support and that means a climb towards trendline resistance at the upper boundary of the downward-sloping channel in place for almost three months is possible.
Gold Price Chart, Daily Timeframe (Year to Date)
Currently, the trendline support lies just under $1,240 per ounce. With the price currently not far from $1,257, a bounce could mean a climb as high as $1,290. Meanwhile, to the downside there is further support at the $1,236.58 December 12 low, and at the $1,234.23 200-week moving average.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.