A quick look at GOLD

Moves on the GOLD market have been largely confined to the $2,015 - $2,035 per ounce trading range over the past three weeks. While bulls managed to push the price above the upper limit of the range on January 12, 2024 and even reach the textbook range of the upside breakout, GOLD returned to the $2,015 - $2,035 range on January 16, 2024, and has been trading there since, spare for a false downside breakout on January 17-18, 2024.

Taking a look at GOLD chart at H1 interval, we can see that price made another test of the $2,035 per ounce resistance zone today, but bulls failed to break above. A strong reversal occurred followed with the price dropping below the mid-point of the range - $2,025 per ounce. However, this pullback was halted at the intersection of 50- and 200-hour moving averages (orange circle) and price recovered back above $2,025 mark. Moreover, it should be noted that 50-hour moving average (green line) climbed above 200-hour moving average (purple line) painting a technical pattern known as 'golden cross'. This is a bullish pattern, but caution is needed as it tends to be a lagging pattern. The near-term level to watch in case the price continues to rise is the aforementioned upper limit of the trading range in the $2,035 per ounce area. Direction of the breakout from the $2,015 - $2,035 range may determine the direction of the next big move, with the textbook range of the breakout being around $20 per ounce. 

Gold traders should keep in mind that there is FOMC rate decision scheduled for Wednesday this week (7:00 pm GMT) and it could be an important mover for USD and precious metals.

Source: xStation5