GOLD : Outlook

(Fri, 12 Feb 2021). The price of gold is struggling to find any real direction with all of this week’s gains given back so far. The small pick-up in the US dollar is weighing on the precious metal although the move in the greenback has been small at best. From a technical viewpoint, gold remains under downside pressure from all three simple moving averages with the 20-day sma (red line) acting as initial resistance this week. Gold will need to open above this indicator if it is to regain any bullish sentiment.

Initial resistance off the 20-day sma currently at $1,840/oz. is followed by this week’s high at $1,855/oz. and the 50-day sma at $1,860/oz. In the short-term it looks increasingly likely that these levels will cap any further upside. Support for gold starts at around $1,807/oz. with various levels of horizontal support seen on the chart all the way down to $1,764/oz. which also coincides with the 50% Fibonacci retracement of last year’s March to August rally. It looks likely that unless there is a sharp change in market sentiment, the value of the US dollar or US Treasury yields, then gold will continue to fluctuate in a $1,760/oz. to $1,860/oz. range for now.

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