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MTrading Team • 2022-05-11

Gold bears need validation from $1,835 to take control

Gold bears need validation from $1,835 to take control

Gold’s failure to rebound from $1,850 joins bearish MACD signals to keep sellers hopeful as markets await the key US inflation numbers. However, a convergence of an ascending support line from August 2021 and 200-DMA appears a tough nut to crack for bearish as RSI nears the oversold territory. It should be noted, however, that a clear downside past $1,835 will make the metal vulnerable to drop towards the yearly low surrounding $1,780. During the fall, the $1,800 threshold may act as an intermediate halt.

On the contrary, recovery moves may again aim to cross an 11-week-long horizontal hurdle of around $1,890. Following that, the 38.2% Fibonacci retracement (Fibo.) of August 2021 to March 2022 upside, near $1,916, will be on the gold bull’s radar. In a case where gold prices remain solid past $1,916, an upward trajectory towards $1,980 can’t be ruled out.

Overall, gold approaches crucial support ahead of the all-important US CPI and a strong reading will suggest escalating price pressure, which in turn could solidify the USD while likely negatively affecting the quote.

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