Gold price is trading around the $1,800 resistance. So, will this recovery continue or will it stall? Analyst Jordan Roy-Bryne offers his insight by examining charts for the precious metal. cryptocoin.com We review as…
Analyst gave resistance and support levels for gold price
Drawing attention to the 200-day moving averages along with Gold, VanEck Gold Miners ETF, HUI and VanEck Junior Gold Miners ETF, the analyst says that since the beginning of summer, gold stocks have shown a downward trend, while gold has followed a sideways course. On the other hand, gold continued to wrestle with the 200-day moving average ($1,794) while gold stocks rose to the 200-day moving average. The analyst says the key resistance level for gold on the daily and weekly charts is $1,835.
For clues to the short-term outlook, the analyst, taking a look at a few indicators, plots gold along with gold against foreign currencies (Gold/FX) and the stock market in the chart below. Gold/FC tends to lead gold at key turning points. YP has outperformed gold over the past few months, but there is no significant difference yet, according to the analyst. Gold, on the other hand, remains incredibly weak against the stock market. That should change if the precious metal is to rise above $1,835.
Analyst: 2016-2019 levels need attention
As the next step, the analyst, drawing attention to the progress-decline chart, says that it is a reliable indicator for any market group. “We plot this below along with a 15-day and 25-day forward-decline line to gauge a potential ‘breadth pressure’. A breadth pressure occurs when a market moves from an oversold condition to strength. This is best measured by the sudden power in the progression-decline graph,” he says.
Breadth occurs following lows, but can sometimes occur at market highs as well. Roy-Bryne states that attention should be paid to the movement in the 15-day and 25-day declines and the increases after the 2016 and 2019 lows. If GDX can show significant strength for another week or two, the 15- and 25-day indicators could signal a broad move that could be evidence of a major bottom.
At the moment, the analyst says that there is no positive divergence in gold, saying that there is lack of evidence that precious metals will overcome past resistance. While he says the market will lay slightly bullish fundamentals, he argues that history won’t start until the next big move in the industry, without the Federal Reserve raising interest rates.
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