Gold Price Could Struggle To Gain Traction – Here’s Why

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Key Highlights

  • Gold prices dropped toward the $1,970 support before the bulls appeared.
  • A key bearish trend line is forming with resistance near $2,036 on the 4-hour chart.
  • Crude oil prices started a recovery wave above the $71.20 resistance.
  • AUD/USD rallied and cleared the 0.6700 resistance zone.

Gold Price Technical Analysis

Gold failed to continue higher and corrected lower sharply below $2,050 against the US Dollar. It even dived below the $2,000 support before the bulls appeared.

The 4-hour chart of XAU/USD indicates that the price traded as low as $1,972 and recently there was a recovery wave. There was a move above the $2,000 resistance zone. The price cleared the 100 Simple Moving Average (red, 4 hours) and the 200 Simple Moving Average (green, 4 hours).

However, the bears seem to be active near the 38.2% Fib retracement level of the downward move from the $2,145 swing high to the $1,972 low.

There is also a key bearish trend line forming with resistance near $2,036 on the same chart. An upside break above the $2,036 level could send the price soaring toward the $2,0600 resistance. The next major resistance is near the $2,080 level, above which Gold could test $2,120.

If not, the price could start a fresh decline. Initial support is near the $2,000 level. The first major support sits at $1,995 and the 200 Simple Moving Average (green, 4 hours).

The next major support could be $1,970. Any more losses might call for a move toward the $1,960 level in the coming days.

Looking at crude oil, there was a recovery wave above the $71.20 level, but the bears might appear near the $75.00 zone.

Economic Releases to Watch Today

  • US Housing Starts for Nov 2023 (MoM) – Forecast 1.360M, versus 1.372M previous.
  • US Building Permits for Nov 2023 (MoM) – Forecast 1.470M, versus 1.498M previous.

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