Gold price started the week with a slight decline. According to technical analyst Ross J Burland, gold respects important support structures. Also, the yellow metal is poised to gain more. The analyst sees a high probability of a bullish extension this week.
Gold in a downtrend due to uncertainty
Gold price declined to $1,787.00 after failing to stay near the critical resistance of $1,805.00. The precious metal turned bearish as investors worried over uncertainty over the Federal Reserve’s (Fed) policy outlook.
cryptocoin.comAs you follow, the US November jobs report came in better than expected. Subsequently, new developments in the US economic outlook signaled that the Fed would either continue the pace of raising current rates or provide higher interest rate guidance to offset new evidence pointing to a recovery in inflation. However, Fed policymakers have warned that the continuation of a more pronounced rate hike regime will accelerate financial risks in the US economy.
Meanwhile, the US Dollar Index (DXY) struggles to surpass the sudden resistance of 105.20. S&P500 futures are underperforming as investors slide to the sidelines ahead of Fed policy. In the future, investors will also focus on the US Consumer Price Index (CPI) data, which will be released on Tuesday. According to the consensus, headline inflation will remain unchanged at 7.7%.
Gold price technical analysis
Technical analyst Ross J Burland explains the gold price technical view on the charts as follows. Based on previous analysis, gold sees a typical correction opportunity below critical resistance. Gold price respects the key structure and is now expected to break the previous daily resistance.
On the reverse side of the trend, the price is up from the harmonic pattern and the W-formation is above the lows near $1,730. Let’s take a closer look at it.
As you can see above, there was a possibility of a correction towards the neckline of the W-formation. But if the bulls had made a commitment, there would have been a breakout towards $1,860 on the cards according to the daily chart.
Price respected 61.8% as support. It has also formed a bullish micro trendline that the bulls can hold onto in the coming days.
From an hourly perspective, the bulls have formed an internal trendline. Besides, it remained on the bullish front for the opening exposing $1,800.
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