Tuesday, June 18, 2024

The technical signal is bearish!

In the Asian market on Friday (September 21), spot gold rebounded slightly after yesterday’s heavy decline, and the gold price was now around $1,923 per ounce. FXStreet chief analyst Valeria Bednarik recently wrote an article analyzing the technical prospects of gold.

Bednarik pointed out that gold prices are technically bearish and may soon fall below the $1,900/ounce mark.

Spot gold closed down $10.37, or 0.54%, on Thursday at $1,919.80 per ounce.

The Federal Reserve kept interest rates unchanged on Wednesday as scheduled, but opened the door to another rate hike for the rest of the year. This caused the U.S. dollar to continue to rise, and gold prices fell to as low as $1,913.91 per ounce on Thursday.

Higher U.S. Treasury yields also weighed on gold prices. The 2-year U.S. Treasury yield peaked at 5.202%, the highest level since 2006, and is currently hovering around 5.14%. At the same time, the 10-year U.S. Treasury yield was 4.47%, up 12 basis points on Thursday.

Gold short-term technical outlook analysis

Bednarik said that the daily chart shows that gold prices are currently below all moving averages. Meanwhile, technical indicators are gaining downside traction within negative levels, consistent with continued selling interest. In addition, gold prices peaked this week at the 61.8% Fibonacci retracement level of the decline from 1982.15 to 1884.77 US dollars/ounce at 1946.10 US dollars/ounce, and then fell sharply. Gold prices also fell below the 38.2% Fibonacci retracement level of the above-mentioned decline at $1921.80 per ounce.

Bednarik added that the 4-hour chart of gold also supports the continuation of the bearish trend in gold prices. Gold prices are hovering near the 200-period simple moving average (SMA), while the shorter-term averages are gaining bearish strength above it. Furthermore, technical indicators are holding steady below their midlines, losing little of their bearish potential.

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Bednarik gives the latest key support and resistance levels for gold prices:

Support levels: $1907.30/ounce; $1897.20/ounce; $1884.70/ounce

Resistance level: $1933.30/ounce; $1946.10/ounce

At 09:35 Beijing time, spot gold was trading at $1,923.13 per ounce.

 

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