Gold saw gains stall yesterday just above $1,850 as price ran into a test of its 200-day moving average
Gold is keeping flatter on the day but saw gains stall yesterday after popping higher on the US CPI report with a jump to $1,855. The upside move stalled though after running into resistance from the 200-day moving average (blue line), now seen @ $1,856.38.
The broken trendline support - now turned resistance - is also acting as an added layer of defense for sellers for the time being, alongside the 38.2 retracement level of the swing move lower to start the year @ $1,851.60.
Despite the solid rebound from just below $1,800, this is where buyers will really have to show their mettle in trying to extend the upside momentum.
Otherwise, the recent bounce may just prove to be a bit of a short relief for gold but at least it provides some indication of structural appetite in the bigger picture.
Drilling down to the near-term chart:
Buyers are still in near-term control as they keep above the 200-hour moving average (blue line), now @ $1,833.06. Keep above that and the bias stays more bullish but break below and sellers will start to threaten a potential turnaround again.
Fed chair Powell yesterday reiterated the same message as we have heard before since January so the fundamentals at play remain unchanged. Hence, look towards the technical levels highlighted above for a better sense of the next directional move for gold.
