Gold Price Update: Drops Further after Record High; Eyes on Support Levels
Gold’s drop from its peak of 2,450 has brought it close to important support levels, including the 20-day Moving Average (MA) at 2,348. After losing momentum, gold fell below the past two days’ lows, finding support at a three-day low of 2,375. As of now, trading remains near the day’s lows. Sellers took charge following Monday’s record high of 2,450, which ended weakly with prices in the lower half of the day’s range. However, gold is approaching key support levels that could sustain its uptrend.
Key Support Trendlines
Several trendlines converge around 2,364 to 2,356, with the 20-Day MA at 2,348 slightly lower. Gold’s response to this 20-day line will be crucial. In April, the 20-Day MA was briefly broken before gold rallied above it again on May 9, confirming support and leading to a new record high. If today’s weakness retests the support around the 20-day MA and prices bounce back up, the uptrend will remain intact.
Weekly Support Level
Last week’s low at 2,332 offers another potential support area. The weekly chart (not shown) indicates an uptrend, with this being the third consecutive week of higher lows and highs. Therefore, this level is crucial if the retracement approaches that zone. On the daily chart, the weekly low aligns with the most recent swing low, where the 20-Day line acted as support.
Monitoring Support Reactions
Unless proven otherwise, the uptrend is expected to continue after a pullback. A daily close below the 20-day MA might alter the near-term outlook, risking the current uptrend’s structure. Recently, gold’s advance from the last swing low made a second attempt to break out from two rising parallel trend channels, with a significant support line of around 2,364, which is crucial if reached today.
