Gold is at a key level, and the next direction will be important for the short-term trend. Buyers are trying to hold the $5,000 mark, but for now, sellers are in control.
Based on the latest outlook shared by Shirley, gold may have a small bounce before another possible sell-off. The key support for the gold Price is the zone ranging from $5,050 to $5,064, which is consistent with what is seen in the chart.
What you'll learn 👉
What the Gold Chart Is Saying
It is obvious that the gold price is rebounding from a lower support zone and is ready to start a new short-term increase, as suggested by the rising trendline. Nevertheless, it is not a reversal trend; it is a temporary correction of a bearish trend.
The price is approaching a resistance zone between $5,050 and $5,064, which previously rejected the gold price. This zone may continue to experience some selling pressure in the near future. The current trend still indicates lower highs, meaning that the bearish trend is still intact.
The projected path also indicates a possible rejection at this resistance zone before a further downside continuation for gold.
However, the most important levels are clearly indicated on the chart. The resistance is still in the $5,050 to $5,064 zone, and in the near term, it is in the $5,038 to $5,043 zone.
The support is in the $5,010 to $5,000 zone in the near term, and in the event of a further downside break, $4,990 is the level before $4,960.
Likely Scenario For Gold Price
The most likely short-term scenario is a slight move up into the resistance zone between $5,050 and $5,064, in which case buyers may start selling again.
However, in case the gold price is rejected from this area, it may start moving lower towards $5,010 and possibly retest the $5,000 level.
But in case the $5,000 support level fails to hold, then this bearish trend may continue and move lower towards $4,960 as the next target.
What Could Invalidate This?
If the gold price manages to move above $5,064, then the bearish case does not seem as promising. This is because an increase above this level indicates a high buying interest in gold and may change the trend in favor of the bulls.
Gold is at an unstable point as it has a strong support at $5,000. Yet, a short-term bounce is quite possible; however, the trend is still bearish.
Unless there is a rise above this point, a fall towards $4,960 remains a strong possibility.
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