Following a sudden fall to $3120, gold prices drew in buyers, pushing prices back over the psychological barrier of $3200. This recent rebound represents a critical reversal chart pattern that action-oriented Gold Bulls have been eyeing this year. All in all, this recent price action shows us that solid footing above $3200 is key for maintaining bullish momentum in the gold market.
As the last sell-off pushed gold down to $3120, a substantial bottom feeding buying interest came into play. As physical buyers moved in, gold very quickly snapped back, re-taking the key psychological level of $3200 and vaulting up to $3211. This recovery gives us a chance to not just recoup that lost ground, but build off it and make a whole lot of new ground.
Gold faces immediate hurdles. The overhead resistance at $3215 is the first major test for bulls wanting to push prices higher. A solid breakout above this resistance would open up the next target at $3234. Analysts point out that making this resistance is critical for keeping the bullish picture intact.
Further out, gold’s long-term upward path is still guided by a wide bullish trend channel, indicating long-term bullish continuation. Further up, the next major resistance level is at $3234, with the 50 Exponential Moving Average (EMA) worth noting, at $3260. The 100 Simple Moving Average (SMA) is at $3290. A strong move above this level would likely trigger a major bullish surge up to the key resistance at $3390.
If gold does experience a fallback under this $3200-$3180 mark, there is additional downside potential. Should the above scenario play out, support levels near $3180 would be in focus, revealing some downside towards $3170-$3160.