Gold Technical Outlook:
- Gold weakness has big long-term level coming into view
- Area around 1676 a big one to watch, could induce a strong rally
Gold finally came out of a coma and started to move this week, which now has a major level starting to come into view. The area immediately surrounding 1676 is an interesting one, with it having marked a double-bottom in 2021.
It first began as resistance in March 2020, but then became validated as support from May thru June of that year. Last year there were a couple of powerful lows created (double-bottom), making it a very big level to watch.
Viewing support within the context of a long-term uptrend it could present an opportunity for would-be longs. A thorough testing of the level could present a set-up for both short-term traders looking for a fade off an important level and for big-picture traders looking to time a macro trade back to record highs and possibly higher.
Ideally, we see the level broken by a marginal amount but quickly reclaimed. This ‘rinse and reverse’ price action can lead to powerful moves in the opposite direction.
For now, price is still yet to test the 1676 area and on that there is still room for traders looking to take advantage of shorts. But as we close in on support risk/reward will quickly become skewed negatively against bearish wagers.
Gold (GC1!) Weekly Chart
Gold Futures Chart by TradingView
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
