Gold steadied on Wednesday, a day after its largest sell-off in nearly two months, buoyed by consumer demand, which helped offset the potentially negative impact of a stronger dollar following fresh upbeat U.S. data.
A ray of sunshine for investors, however, is the predictable bouncing behavior we should see in gold prices for the next month or so. I’d expect to see gold bouncing against the $1360 price mark at least one time before continuing a strong uptrend. Entry orders for long positions around that price are to be expected; I would be surprised to see a major breach below that point as a result.
Below is the daily chart of gold provided by ForexYard. I’ve drawn Fibonacci retracement lines over the chart to illustrate the support and resistance levels relevant. It’s clear that at the 23.6% retracement level we have a very solid support line which has been tested in the last month. This line is also on the price of $1360 an ounce which, as mentioned earlier, represents the lower border of our range-trading trend.
Once again when the rising trend has been identified, traders should only be long on gold. Entries and exit strategies should then be identified from the hourly charts.
Gold Daily Chart