Gold Current trend: Gold prices are consolidating near the psychological support at 1800.00, developing a weak downtrend since the end of last trading week. Demand for the precious metal is moderately declining as investor activity recovers.
Traders ignore the difficult epidemiological situation in the world and focus on the prospects for further tightening of monetary policy by leading financial regulators. First of all, one should expect a rate increase from the US Federal Reserve and the Bank of England, while the European Central Bank (ECB) is in no hurry to take active steps, waiting for more clear signals from the economy.
The macroeconomic statistics from the US released the day before did not have a noticeable impact on the dynamics of the instrument; however, it attracted attention with a sharp drop in the NY Empire State Manufacturing Index. In January, the indicator fell from 31.9 to -0.7 points, while forecasts suggested a decline to only 25.7 points.
Today, investors are focused on the statistics from the US on the dynamics of the construction market and data from Canada on the Consumer Price Index for December. In turn, statistics on inflation in Germany and the UK will be released in Europe.
Gold Support and Resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is slightly narrowing from above, reflecting the correctional decline in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic shows a more confident decline, but at the moment it is quickly approaching its lows, indicating growing risks of the instrument being oversold in the ultra-short term.
| Gold Price Resistance levels: | $1814.06, $1823.09, $1831.66 |
| Gold Price Support levels: | $1805.50, $1800.00, $1790.00, $1778.32 |
Gold Trading Tips
| SELL | To open new short positions, one can rely on the breakdown of $1805.50 with the target at $1790.00. Stop-loss – $1814.06. Implementation time: 2-3 days. |
| BUY | A rebound from $1805.50 as from support followed by a breakout of $1814.06 may become a signal for new purchases with the target at $1831.66. Stop-loss – $1805.50. |