Gold bounce at this time retains patrons going into month-end

On the month itself, gold remains to be down round three.5% and poised for its first month-to-month loss since June. And if this holds, it could be the most important month-to-month loss for the valuable metallic this yr. That claims loads about how bullish sentiment has been for gold over the last twelve to 14 months, that solely a three% drop sounds “unhealthy”.

The rebound final week week helped to restrict the post-election stumble in gold. However patrons had been dealt a setback earlier this week. I’d argue some added profit-taking additionally had one thing to do with it. In any case, it dragged gold down to check the 38.2 Fib retracement stage of the rebound final week earlier than patrons stepped in. This is a have a look at the near-term chart:

The bounce at this time builds on the maintain yesterday on the technical stage above, earlier than patrons moved on to maintain value above its 200-hour shifting common (blue line). However as value motion remains to be under the 100-hour shifting common (purple line), the near-term bias stays extra impartial for now.

As a lot because the pullback in gold costs this month may need been well timed, the depth of the correction is hardly something materials. It is not even placing a scratch on the armor to the gold rally this yr, not to mention a dent of any kinds.

The outlook for gold stays bullish and we’re shifting in the direction of a extra seasonally favoured interval as effectively for the valuable metallic. Whereas optimistic on paper, the one-sidedness of the strikes this yr is the one gripe I nonetheless have with gold heading into December and January. That regardless of nonetheless retaining a extra bullish outlook within the large image.

Going again to at this time’s motion, the most recent bounce does not imply a lot from a technical perspective but. But it surely reveals that patrons are nonetheless staying within the recreation and are eager to step in to keep up the bullish momentum this yr. The check of the 100-day shifting common earlier this month additionally reaffirms that.

So, we’ll see if patrons can hold this up with month-end in focus and the greenback additionally seeing some softer flows at this time.

A push again above the 100-hour shifting common close to $2,660 will likely be a key near-term check to look at. In that case, patrons could look in the direction of one other run on the $2,700 mark as soon as extra going into December.

This text was written by Justin Low at www.ubaidahsan.com.



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