Gold Value Flirting with Potential Breakout Above $1,900

GOLD PRICE OUTLOOK: TECHNICAL RESISTANCE IN FOCUS AS PRECIOUS METALS STAGE BULLISH REVERSAL

• Gold value motion challenges technical resistance posed by the $1,900-level
• Valuable metals have tried to rebound off their current swing lows
• Gold and silver costs might prolong increased if US Greenback weak spot persists

Gold value motion has staged a wholesome rebound try over current buying and selling classes. The dear steel has climbed roughly 5% because the begin of December in an effort to finish its dropping streak of four-months straight. Gold costs at present hover barely beneath the psychologically-significant $1,900-level, which to date has saved sustained advances at bay. This space of technical resistance seems more likely to be challenged, nonetheless, as short-term bullish and medium-term bearish pattern strains converge.

GOLD PRICE CHART: DAILY TIME FRAME (14 JUL TO 28 DEC 2020)

Chart by @RichDvorakFX created utilizing TradingView

Gold costs have superior steadily since bulls reclaimed the positively-sloped 200-day easy transferring common. Defending this key technical degree appears to have sparked the resumption of shopping for pressures corresponding with a string of upper lows and better highs. That mentioned, eclipsing the essential barrier of resistance round $1,900 might recharge gold bulls. This potential breakout degree may tee up a heartier push towards the 61.8% Fibonacci retracement degree of the buying and selling vary developed since August.

GOLD PRICE CHART WITH US DOLLAR INDEX OVERLAID: DAILY TIME FRAME (NOV 2019 TO DEC 2020)

Chart by @RichDvorakFX created utilizing TradingView

Maybe one other leg decrease notched by the US Greenback might gas a stronger rebound by treasured metals. Gold value motion usually maintains a powerful inverse relationship with the US Greenback Index as indicated by their 20-day correlation. To that finish, gold and silver costs might face renewed headwinds if a reversal by the US Greenback begins to materialize.

— Written by Wealthy Dvorak, Analyst for DailyFX.com

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