Gold prices started the week defensively after the pullback last week. The yellow metal’s bullish momentum is waning, according to ANZ Bank strategists. So more technical sales are possible.
“The bullish momentum of gold is weakening”
Further selling could lead gold prices to drop below $1,800 in the short term, according to strategists in the ANZ Bank report. Strategists point out the following levels:
Gold hit $1,960 in the first week of February, but strong US jobs data prompted a sharp 4% correction. Although this correction looks normal after a 20% price rally, the uptrend seems to be waning. Further declines in gold prices could trigger more technical selling in the short term. Key supports are $1,800 and $1,730. On the upside, close resistance is at $1,900. If the price climbs above $1,930, it confirms that the uptrend will continue.
Gold price technical view
cryptocoin.com As you follow on , the price of gold attracted purchases on Tuesday and dropped most of the previous day’s decline to the $1,850 level, or the lowest level since January 6. The yellow metal held on to modest intraday gains in the first half of the European session and is now trading just above the $1,860 level, up around 0.50% on the day. Market analyst Haresh Menghani analyzes the technical outlook for gold as follows.
From a technical standpoint, an overnight break below the 50-day Simple Moving Average (SMA) could be seen as a new trigger for bearish traders. Therefore, any subsequent rally can still be seen as a selling opportunity and risks a fiasco fairly quickly near the $1,872-1,875 region. This is closely followed by the $1,890 hurdle, where gold price could break the $1,900 mark and test the next relevant resistance near the $1,925-$1,930 congestion zone.
On the flip side, the $1,850 level seems to protect the current downside. Some continued selling could drag the gold price towards the $1,830 intermediate support on its way to the $1,818-1,817 region and the $1,800 round figure.
Gold could slide back to the $1,800 region
Open interest on gold futures markets rose by just 375 contracts for the first time since Monday, February 2, according to preliminary data from CME Group. Instead, the volume shrank by about 25,000 contracts this time in the second consecutive session. Market analyst Pablo Piovano states that gold has started the week defensively. Despite the small increase in open interest, there is room for more weakness in the very near-term and next key target area of $1,800.
