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Talking Points:
- Gold Prices have finally found some element of support over the past few days as buyers have showed north of the $1,214.13 low set on Tuesday.
- Current price action is finding resistance at an area of prior support around $1,225.
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In our last article, we looked at the recent downtrend in Gold prices as the Yellow metal had been unable to establish any type of lasting support since the bearish run kicked off three weeks ago. After the first round of French elections, Gold prices set a new short-term high at $1,295.46; but that’s the point where sellers began to take over as less than a month later we’ve seen a run of more than $80. But after multiple attempts to drive down to new lows have been thwarted, bullish price action has begun to show as as prices just posed a quick-spike through the ‘r1’ resistance level that we looked at in our last article; residing around the $1,225.45-level.
Chart prepared by James Stanley
Also of note is the fact that short-term Gold prices are showing both a recent higher-high as well as a higher-low; and this could be further evidence that the bigger picture downtrend may not yet be ready for resumption.
Chart prepared by James Stanley
Given how oversold the move had become in the early portion of this week, we may still have some additional room to run to the up-side before sellers might be motivated enough to re-take control. Traders would likely want to wait for a more confirmed setup before looking to trigger fresh shorts, and this can be approached in one of two ways depending on whether or not this short-term higher-high at $1,227 remains respected. If this high does get taken out by the end of today, then traders will likely want to wait for a deeper retracement. If this high remains respected and if bulls are unable to bring prices beyond this level, then the short-side swing re-entry could be attractive with stops applied above that prior high.
Chart prepared by James Stanley
--- Written by James Stanley, Strategist for DailyFX.com
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