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Denis Sergienko • 2022-04-28

Gold bears approach key support ahead of US GDP

Gold bears approach key support ahead of US GDP

Gold sellers cheer firmer US dollar and a sustained break of the three-month-old ascending trend line at the lowest levels in nine weeks ahead of the key US Q1 2022 GDP data. However, a convergence of the 100-DMA and 61.8% Fibonacci retracement (Fibo.) level of December 2021 to March 2022 upside, surrounding $1,875, appears a tough nut to crack for the metal bears. Also acting as a downside filter is January’s high of $1,853 and 78.6% Fibo. level near $1,819, a break of which will make the bullion vulnerable to drop towards the sub-$1,800 region.

On the flip side, recovery remains elusive below the 50% Fibonacci retracement level around $1,910. Following that, the 50-DMA and previous support line will challenge the gold buyers at around $1,938 and $1,943 respectively. Even if the metal prices rally beyond $1,943, a two-month-old horizontal area between $1,975 and $1,982 will be a tough challenge.

Overall, gold bears have the controls but need validation from strong support to dominate further.

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