Can gold hold above the $5,000 level? For now, price action has been quite calm in recent trading, notes Fawad Razaqzada, technical analyst at TradingCandles.
After gold’s sharp breakdown a couple of weeks ago, I was initially looking for another leg lower around the early parts of last week. At the time, price was moving within a rising wedge on the intraday charts, which eventually did resolve to the downside.
We saw a fairly aggressive selloff, although gold bottomed at $4,655 – and therefore didn’t create a lower low beneath the recent low of $4,402. I was expecting another dip to the key $4,500 level. But the fact that gold made a higher low instead is impressive, as is the recovery that followed.
Gold has since broken back above a couple of key levels, shifting the short-term technical bias back towards bullish territory. The next area to watch sits between roughly $5,070 and $5,100, which previously acted as support before the market broke lower a week and a bit ago.
So, here we are again. If gold can reclaim and hold above this region, that would be a clear bullish signal, opening the door for a potential move towards $5,290 or even $5,390 – both previous breakdown levels. On the flip side, those reclaimed support levels now need to hold. A break back below the $4,970 to $5,000 region, could bring sellers back into play.
