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Gold Signals Caution: A Shift in Trend Ahead?

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Aayush Jindal

Key Highlights

  • Gold failed to clear the $2,725 resistance and corrected gains.
  • A connecting bullish trend line is forming with support at $2,630 on the 4-hour chart.
  • Oil prices are struggling to clear the $71.50 resistance.
  • EUR/USD could decline if it breaks the 1.0450 support level.

Gold Price Technical Analysis

Gold prices remained well-bid near the $2,615 zone against the US Dollar. The price formed a base and started a fresh increase above $2,640 and $2,680.

The 4-hour chart of XAU/USD indicates that the price even climbed above $2,700 but struggled to clear the $2,725 level. As a result, there was a bearish reaction below the $2,700 and $2,680 levels. The price dipped below the 50% Fib retracement level of the upward move from the $2,613 swing low to the $2,726 high.

It even settled below the 100 Simple Moving Average (red, 4 hours) and the 200 Simple Moving Average (green, 4 hours). On the downside, initial support is near the $2,630.

There is also a connecting bullish trend line forming with support at $2,630 on the same chart. The first major support is near the $2,610 level. The main support is now $2,600. A downside break below the $2,600 support might call for more downsides.

The next major support is near the $2,575 level. On the upside, immediate resistance is near the $2,665 level. The first major resistance sits near the $2,670 level.

A clear move above the $2,670 resistance could open the doors for more upsides. The next major resistance could be $2,700, above which the price could rally toward the $2,720 level.

Looking at Oil, there was a decent increase, but the bulls seem to be facing hurdles near the $71.50 level.

Economic Releases to Watch Today

  • Euro Zone CPI for Nov 2024 (YoY) - Forecast +2.3%, versus +2.3% previous.
  • Euro Zone CPI for Nov 2024 (MoM) - Forecast -0.3%, versus -0.3% previous.
  • US Housing Starts for Nov 2024 (MoM) – Forecast 1.340M, versus 1.311M previous.
  • US Building Permits for Nov 2024 (MoM) – Forecast 1.430M, versus 1.419M previous.
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