Throughout Thursday’s trading session, gold market participants swung back and forth as the market continued to attempt to cling to the support level from which it had rebounded a couple of weeks prior. At this juncture, the question is whether or not we are building a double bottom, or if we are merely rebounding from an oversold state.
At this time, I also believe that a break below this area could open the door for a decline to the $1600 or even $1500 level. Any rally at this point is likely to be met with symptoms of tiredness selling, and I feel that the $1680 level will provide major short-term resistance, as it acted as support for an extended period of time.
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However, our working memory is beginning to deteriorate because we’ve already traversed this territory a few times. Regardless, it is evident that we are in a downtrend, and with the 50-day exponential moving average (EMA) swiftly reaching the $1700 level, I believe there are ample reasons to believe the market will continue to reject rallies in the future.
In addition, it is noteworthy that interest rates continue to rise globally, particularly in the United States. Consequently, it is possible that gold prices could fall further in the long run.
