Gold Price Fails Essential Support, But The Bulls Still Have A Chance | FxPro

Gold Has A Potential For Further Rally

A sell-off in the equity market and a new wave of flight to the dollar on Thursday provided the perfect combination to knock out gold, which slipped to $1810 in thin trading on Friday morning, falling to its lowest level since early February.

The current decline in the price makes us keep a close eye on further developments

Right now, it’s up to gold to decide whether we see a double top formation or whether the bulls are gaining strength and liquidity ahead of a new multi-month rising momentum. The current decline in the price makes us keep a close eye on further developments.

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Gold fails essential support, but the Bulls still have a chance  - 1

A consolidation of the week under $1830 would reinforce that signal

Yesterday, gold took a sharp plunge under the 200 SMA, which is often a bearish factor for the instrument. A consolidation of the week under $1830 would reinforce that signal.

Gold fails essential support, but the Bulls still have a chance  - 2

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A potential bull target, in this case, could be the $2500 area

This would open the way for another roughly 25% drop into the $1350 area, the area of the 2015-2018 highs. If we see an uptick in buyers’ in the hours and days ahead, we could say that gold is in a correction. Potentially, a reversal to the upside from these levels could signal the start of a new wave of long-term growth, the first impulse of which was in 2018-2020, followed by a prolonged wide side trend. A potential bull target, in this case, could be the $2500 area.

Gold Has A Potential For Further Rally

Alex Kuptsikevich

Financial market professional with 16-years' experience and Senior financial analyst at FxPro. Author of daily reviews on the impact of economic events with comments regularly featured in top international and Russian media. Covers fundamental analysis, global markets, foreign exchange market, gold, oil, cryptocurrencies.

Alex Kuptsikevich is a regular contributor to both digital and print media including CNBC, Forbes, Reuters, MarketWatch, BBC and Coindesk.