Gold price plunged from highs above $1,195 yesterday and is currently trading in a sideways manner in a range of $1,181 to $1,186. What is next?
28 September, GKFX – Gold price dropped to a four-week low of $1180. This happened as the US dollar strengthened following the Fed’s monetary policy statement on Wednesday. In the statement, the committee said that a strong US economy continued to support further rate increases.
This led to a belief that another hike will happen in December. Three more hikes will follow in 2019. A strong dollar often leads to a drop in gold mainly because gold is mostly listed in dollars and that most traders view it as a safe haven.
Gold Sell-Off Could Resume
A break below $1,181 would signal a continuation of the sell-off from the highs above $1,195 and could yield a re-test of the August low of $1,160. The 5-day and 10-day moving averages (MAs) are trending south in favor of the bears.
Only a daily close above the 10-day MA would abort the bearish view.
Current Price: $1,184
Daily High: $1,186
Daily Low: $1,182
R1: $1,192 (5-day moving average)
R2: $1,200 (psychological level)
R3: $1,205 (50-day moving average)
S1: $1,181 (range low)
S2: $1,172 (Aug. 17 low)
S3: $1,160 (Aug. 16 low)
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