The gold price crash from March highs above $2,000 caused a lot of technical damage. This development pushed gold into a bear trend. But gold may be on the verge of forming a new short-term bullish move, according to one technical analyst.
“A bullish correction possible for gold in the near term”
Michael Moor, founder of Moor Analytics, says that gold’s recent consolidation of around $1,700 shows that the market is following the course of bearish momentum. He also notes that gold is holding critical technical exhaustion levels just below $1,700. In this context, Moor makes the following statement:
With this year’s sale, we have breached every bull trend. So where the market is right now, the bias is still bearish. Still, we may see a bullish correction in the near term.
Moor adds that it is a little early to determine whether a bullish retracement has the potential to maintain the current trend. He notes that one signal he is looking for is to see if gold prices can rise above $1,800 by mid-August.
“Below this level opens the door to more sharp losses”
Michael Moor also states that gold has been struggling for most of the year. However, he remains hopeful if $1,700 remains as support. In this case, he says, gold is still likely to bounce back to highs above $2,000. He notes that the base price to watch for this will be around $1,850. Moor explains his predictions as follows:
If gold rises above $1,850, this will reveal another major bearish pattern and you are already above a bullish pattern. To me this indicates that there is a high probability that this will peak again.
However, Moor sees gold prices below $1,686 risky. He warns that below this level, the precious metal could suffer more sharp losses. “The next really important level of exhaustion is below $1,564.3,” Moor says.
How to play in the current gold market?
Michael Moor also shares his views on how the current gold market should play out. In this context, he advises investors to adopt a more conservative trading approach. He says they need to establish a position and take some profits on a rally to resistance points. Moor adds that he saw the first resistance around $1,789. Moor explains his recommendations as follows:
When gold hits these exhaustion levels, it’s okay to buy and then sell some of your position in the first wave. This saves equity and the other half of the position. Thus, you can increase your underlying position as the market breaks each bull formation.
cryptocoin.comAs you follow, gold prices continue to maintain their support at approximately $1,700. August gold futures were last traded at $1,713.4, up 0.78% on the day.
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