It has been a poor month for gold but the technical picture shows that it could've been a whole lot worse. Gold is now trading back to around $1,923 but was close to around $1,885 at the lows this month - its lowest levels since March.
So, what does the technicals say at the moment?
The good news for bulls is that they managed to recover price action to trade back above the broken support from the June low at $1,893 and back above the $1,900 mark. Adding to that, they are building back a stronger case for a bounce on a push above the 200-day moving average (blue line) - now seen at $1,911.24.
Keep above that and we're caught in a "possession battle" between buyers and sellers to determine who comes out on top. The downside bias is defined by a drop below the 200-day moving average, while the upside bias is defined by a push above the 100-day moving average (red line) at $1,956.50 currently.
In other words, there is some room for price action to roam but again, I would advise keeping a close eye on the bond market. The developments there and how yields are trending are still a key driver for gold price movement currently:
Buyers can take in comfort and hold out some hope that yields are off the highs. But if the selling pressure in bonds pick up again, that will be major bane for gold prices especially if traders are not confident that major central banks will be cutting rates any time soon.
