Gold’s price action reflects gold’s struggle to break through significant resistance. After reaching $2790.17 at the end of October, the gold price fell to $2536.85 in mid-November. Since then, gold has traded within a narrow range between $2,536.85 and $2,721.42, with the 50-day moving average acting as a ceiling at $2,661.29. The 200-day moving average, positioned at $2485.95, remains a crucial support level, reinforcing downside risk if the current range falls further.
Key support and resistance levels to keep an eye on
Gold prices are consolidating below the 50-day moving average at $2661.29, which has been a key resistance level since mid-December. Until gold definitively overcomes this point, upside momentum is likely to remain limited.
Immediate resistance is at $2630.51, which represents the upper limit of recent price action. A break above $2661.29 would open the door for a move towards $2693.40, followed by $2726.30 – the December swing high.
On the other hand, gold finds initial support at $2583.91. A break below this level could lead to further declines towards $2536.85, the November low. If selling intensifies, the 200-day moving average of $2,485.95 provides the next major support point.
Outlook: Will Gold Break or Hold?
With Treasury yields high and the dollar holding tight, gold is likely to remain under continued pressure. If the 10-year yield rises above 4.631% or the dollar breaches the 109.534 level, gold could see a deeper decline. However, if rates decline and the dollar retreats, gold could gain strength again, testing the $2661.29 mark and possibly $2726.30.