The long-term range is $3,886.46 to $5,602.23. For nine weeks, the market has been straddling its retracement zone at $4,744.34 to $4,541.88.
The intermediate range is $5,602.23 to $4,099.12. Its retracement zone at $4,850.68 to $5,028.04 is resistance. It stopped a rally at $4,891.54 seven weeks ago.
The short-term range is $4,099.12 to $4,891.54. Its retracement zone at $4,495.33 to $4,401.82 stopped the selling last week at $4,453.39.
The black line at $4,481.78 represents a 20% decline from the all-time high at $5,602.23. This is the line that separates the bull market from the bear market. After plunging through it mid-March, traders have been fearlessly defending it.
This week, the direction of Spot Gold is likely to be determined by trader reaction to the long-term 61.8% level at $4,541.88. A sustained move over this level will put $4,744.34 on the radar. A sustained move under $4,541.88 will signal the presence of sellers or the lack of buyers. This could lead to a labored break through $4,495.33, $4,481.78 and $4,402.82. The latter is the last potential support before the 52-week moving average at $4,175.77.
Weekly Outlook
Crude oil collapsing 6% to 7% is doing the heavy lifting for gold right now. If the Personal Consumption Expenditures index confirms that inflation pressure is fading and GDP shows growth decelerating, Spot Gold (XAUUSD) has three inputs all pointing at lower yields and a weaker U.S. Dollar Index. That combination produces buyers. A hot inflation print or a strong GDP number kills the setup and hands control back to sellers.
The 61.8% retracement at $4,541.88 is the line this week. Holding above it keeps $4,744.34 in play. Losing it opens the door to $4,495.33, $4,481.78 and then $4,401.82 before the 52-week moving average at $4,175.77 becomes the last support that matters.
If you’d like to know more about how to trade gold, please visit our educational area.
