- Gold looks south, with the focus on the key 100-DMA support.
- $1932/42 zone is the level to beat for the bulls.
- Focus on US NFP release for the next direction in gold.
The metal fell to the lowest in two months last week after it faced rejection at the two-month-long falling trendline resistance on several occasions. Adding credence to the breakdown, the 21-day Simple Moving Average (DMA) pierced the 50-DMA from above.
The bright metal delivered a weekly closing at $1862, although remained well above the 100-day Simple Moving Average (DMA) at $1845. Note that the price bounced-off the latter for the second straight day on Friday, allowing for a tepid rebound in the coming week.
However, the bulls need to recapture the immediate hurdle around $1875 for the recovery to gain momentum.
Further north, the confluence zone of the 21 and 50-DMA around $1932/42 is the level to beat for the bulls
On the flip side, a daily closing below the 100-DMA could trigger a sharp sell-off towards the next support at the horizontal trendline at $1791.
The 14-day Relative Strength Index (RSI) has turned flat while holding just above the oversold territory, suggesting that there is further scope to the downside.
Although, Friday’s US NFP report will be a key event risk to determine the next direction in gold prices.
Gold: Daily chart
Gold Additional levels
Credit: FX Street