#Gold Technical Analysis# As of Friday (August 9), spot gold was around $2425/ounce during the early European session. Dhwani Mehta, FXStreet senior analyst, wrote a new article analyzing the technical trend of gold price.
Mehta said that the gold buyers have regained the key resistance level of $2415/ounce. From the daily chart of gold, the price avoided breaking the symmetrical triangle pattern, and the relative strength index (RSI) turned bullish.
Spot gold rose $44.51 and closed on Thursday, up 1.87%, at $2427.11 / oz, ending five consecutive trading days of decline.
Mehta pointed out that the rise in gold prices may be due to investors' confidence in the financial market's recovery, and the turmoil on Monday prompted traders to lock in profits from long gold positions to offset losses in other areas. In addition, gold got more bid after the buyers defended the key support area on the daily chart.
So far, gold buyers seem to have become cautious in Friday's trading before the weekly close. Weekend capital flows may continue to play a role, and traders may reposition themselves before the release of the key US consumer price index (CPI) next week.
Mehta said that the United States did not release any important economic data on Friday, which shifted market focus back to risk trends and tensions in the Middle East.
US President Joe Biden and leaders of Egypt and Qatar said on Thursday that they were prepared to propose a "final" ceasefire to end the Gaza war, and called on Israel and Hamas to return to the negotiating table next week to resolve the conflict.
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Mehta wrote that from the daily chart, gold price is still in the symmetrical triangle pattern, and after defending the key uptrend line support level of $2380/ounce, the price failed to achieve a downward breakthrough.
The key leading indicator - the 14-day relative strength index (RSI) has returned to positive territory and is currently close to 55.00, indicating that the upward risk of gold price continuous rebound still exists.
Gold buyers have regained confidence in the potential for bullish trend, with the 21-day simple moving average (SMA) support-turned-resistance level of $2415/ounce.
Mehta pointed out that the short-term obstacle for gold price is the high point of $2459/ounce on August 5th. If this level is broken, the downward trendline resistance level of $2470/ounce and two-week high of $2478/ounce will be challenged.
(Spot gold daily chart source: FXStreet)
In the downside, Mehta added that if the gold sellers regain control, the short-term support level will be at the 21-day moving average of $2415/ounce. If the downward trend continues, the above uptrend line support level of $2380/ounce will once again play a role.
Afterwards, the 50-day moving average of $2371/ounce may immediately save gold buyers.
As of 15:31 Beijing time, spot gold was quoted at $2425.14/ounce.