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Gold has finally seen some respite in its price after it fell to 12-month lows. With slowing growth forecasts being a key reason as to the drop in price. Recessionary fears can sometimes be good for the price as volatility draws money to gold as it is seen as a haven. However, with the USD being so strong and investors pulling their money away from Gold, the commodity has struggled to protect its value.
The price has shown some interesting action in recent days. The weekly price was able to break through its long terms support at about $1690. However, as this level was so significant, the price is now retesting zone. In addition, the price has bounced off the 200-week moving average. The 200-week moving average is often seen as an extremely strong support level and rarely gets broken without significant resistance and then combined with the support zone has proven difficult to break down through.
However, the price is no sure thing to continue to bounce. As seen on the chart, the price is also in a consistent downward channel and has so far failed to break through the top of the channel.
The daily chart confirms the bounce and shows why the price may have found resistance. This is because it is currently resting below the 50-day moving average which is acting as long-term resistance and has acted as resistance since May 2022.
The question remains, will the price remain at its current level, push up or push down. As more economic data comes out and Central banks either double down on inflation or pivot towards easing interest rates which will hopefully provide some more clarity on which way the price may go. At this stage it would be best to wait for a confirmation either to the downside or upside of the channel.
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