- A technical view reflects uncertainties surrounding the gold market
- Investors sit on the fence given a longer-term time frame
- $1285 and $1270 are key levels to watch
Investors on the gold market are sitting on the fence which is reflected at the chart below where the price is treading water and therefore both pivotal resistances and supports remain untouched. Having said that one may notice that a technical view is in line with divergent fundamental signals as on the one hand the bond market suggests lower prices but on the other one a rout seen across equity markets of late could be supportive of the metal price.
The US 10Y bond price implies lower gold prices. Source: xStation5
The US 10Y yield is climbing as much as 4bps today which is weighing on gold prices which in turn made a U-turn yesterday. Taking a look at the chart above we could still consider a possible inverted head and shoulders patter on the US bond market, however until the price stays below its short-term trend line a resumption of a decline seems to be the most likely scenario.
In spite of the fact the a half of the month has already passed, gold prices have remained on the sidelines as a range of moves has reached merely $20. That said there is a likelihood that more decisive moves will occur closer to the end of November. On top of that it needs to underline that many traders could still wait for a confirmation of a bearish signal which emerged last month. However, the price is still holding above its two moving averages which could underpin buyers, hence one could argue that a breakout of these levels seems to needed to convince more sellers.
Traders wait for a possible confirmation of a bearish signal at a monthly time frame. Source: xStation5
There no signals at a weekly interval either. Albeit we could argue that a supply side lurks just around the corner which has been depicted by relatively long wicks at the chart beneath. On the other side, buyers are hovering just slightly above its notable support line placed at $1265.
Weekly candlesticks do not offer any clues for traders, a key support still in place though. Source: xStation5
In turn when we look at a H4 time frame some key levels might be found. First of all, one needs to pay attention to a resistance area located in the vicinity of an upper limit of a channel. Once the price is able to break it to the upside, it could allow bulls to continue climbing up to $1305. On the flip side a pivotal support might stand at $1270 and if it’s beaten then sellers could take a stab at breaking $1265 as well.
$1285 (a resistance) and $1270 (a support) are key levels to watch going forward. Source: xStation5