Although a one-week-old ascending trend line challenges gold bears of late, repeated failures to cross the 200-SMA signals further hardships for buyers. Even if the quote rises past the 200-SMA hurdle of $1,668, the 50% Fibonacci retracement of the metal’s late August-September downturn, around $1,690, appears a tough nut to crack for the bulls. Additionally, the 61.8% Fibonacci retracement, also known as the golden ratio, and the monthly peak could act as extra filters to the north around $1,710 and $1,730 in that order.
Meanwhile, fresh selling could begin on a clear downside break of the stated weekly support line, close to $1,658 at the latest. Following that, the $1,640 could act as the immediate level to watch for the bears. However, the monthly horizontal support area near $1,620 will be a strong challenge for the sellers, a break of which could quickly drag gold prices to the $1,600 round figure while any further south-run won’t hesitate to challenge the April 2020 low near $1,572.
Overall, gold remains on the bear’s radar but the fresh selling should wait for a $1,658 breakdown.
