Test resistance around 20 days MA
The 20-day MA had done a good job of defining trend support before the breakdown as it was reclaimed on August 8. Note that last week’s breakdown broke through the 20-day MA at the same time the internal uptrend line was broken. the disadvantage. Further weakness was indicated at the drop below the 50-day MA and then at the next lower uptrend line. Therefore, a pullback appears likely once previous support levels are tested as resistance. That could happen at the levels mentioned above, including the 2,710 swing high. For now, buyers remain in charge.
Near-term support at 2,648
A drop below today’s high of 2,648 signals weakness and the possibility of a deeper pullback. The previous swing low, also a monthly low, appears to be the first major support level that can be tested on the way down. Both Wednesday’s low at 2,619 and Tuesday’s low at 2,610 can also be watched for signs of further weakness or potential support above the swing low.
Probably within a week
Gold will likely end this week with an inside-week pattern. Until gold falls through the week’s bottom at 2,564 or to the top, currently at 2,674 (week not over yet), it will remain within the week’s range and therefore choppy trading and consolidation on the shorter daily time frame may dominate for a while . . As noted earlier, this week’s low bounced right after a test of support at the 20-Week MA, while last week’s low closed at moving average support last week after a small dip below the line.
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