Gold trading in New York on Thursday has continued that pattern, with prices moving close to three-week highs. And as market dynamics start to change, gold at the moment is testing offers near the $4,200 mark. To get buyers rolling again, analysts say a daily candlestick close above this level is critical. Such a movement would push gold next to the psychological resistance point at $4,250.
Today’s short video describes the current trading environment for gold, and highlights important technical levels that traders and market watchers are actively focused on. The next downside target for gold comes in at the 21-day Simple Moving Average (SMA)—currently at $4,087. If the price should fall beneath this support, it would likely meet more selling pressure at the $4,050 psychological barrier.
Market observers are also intently monitoring the price of gold. They are looking for a pullback to find support at the former resistance line of $4,129. This figure shows the 23.6% Fibonacci Retracement level of the parabolic rise that started on August 19. If gold is able to hold above the $4,129 level, it may create a foundation for a run at its all-time peak. Currently that record is $4,382.
Gold’s new all-time high, set in May of this year, is a crucial level for market players. The price action in the run-up to this peak is much more volatile. Unprecedented demand has played a large role, as investors have rushed to safe-haven assets during the economic turmoil. The positive tone in recent trading indicates that buyers are still stubbornly focused on the upside, even with changing market sentiment.
Technical analysts have noted that if bitcoin can hold $4,200 and stay above this threshold, it would indicate a change in momentum. If the price keeps fishing daily above this level, it is expected to attract more buyers. This should open up room for setting and achieving even more ambitious targets. Going forward, all eyes on the market will be on how buyers respond in the coming days and weeks. Will they continue to capitalize on the opportunity afforded them by today’s bullish mood?
If indeed we begin to see a downturn, traders will be looking closely to watch the support levels discussed above. If the market price falls below $4,087, this would likely result in significant sell pressure. This could set the stage for a retest of the key psychological barrier at $4,050. Therefore, holding above these key levels remains important to continue bullish momentum.