Gold prices continue to prove remarkably resilient, holding above the now-rising daily Ichimoku cloud despite recent ups and downs. Although the precious metal’s 14-day momentum has dipped below the centerline, it still remains in positive territory. That means bullish sentiment still has a foothold. Gold has recently taken out very important support near the $3340 area. Now traders are waiting with bated breath to see if the market produces any more bearish signals.
On the NYSE trading floor gold fell to a session low of $3334. This emerging movement has caught the attention of many as it created a long-tailed hourly hammer candle, one of the most perfect looking reversal candles. Analysts are of the opinion that gold should settle a fall underneath the $3340 help line. Only under those conditions will a bearish failure swing pattern be fully realized. A clear break beneath this level would bring a swift bearish reaction, sending prices down sharply from there.
The cause of the recent gold price sell-off can be traced back to the inflation data coming in hotter than expected for the U.S. for June. With this data, worries about the Federal Reserve’s monetary policy have increased. People are now particularly concerned with its latest decision to maintain interest rates at their current levels. The market seems spooked by inflation and high interest rates. This is a legitimate concern that has historically affected gold prices, and today is no different.
What used to be fairly straightforward has become highly complicated. Further, demand for gold as a safe-haven asset has increased with the uncertainty of former President Trump’s tariffs. When the world is facing geopolitical and economic uncertainty, investors tend to rush toward gold. This rising trend has sustained global interest in the metal, notwithstanding short-term overall price drops.
Expect considerable resistance ahead at $3353, $3365, $3374, and $3392. The policy is being looked at very closely by analysts. A breakout beyond the $3353 level would trigger a retest of the $3365 into the mix, paving the way for a potential run back toward the $3374 tops. Traders are intently eyeing crucial support at $3340, $3337, $3332 & $3328. Therefore, these are metrics that would be very helpful for giving us more context about where the market is heading.