Gold Medium-term Technical Analysis

Gold has failed to stage a bounce, despite the US dollar index moving lower for three straight now and being well away from its 20-year high that it set during the previous trading week.

Traders looking for a buy signal in the yellow metal have little to go on as buy volumes appear light, and the rebound from below the $1,700 support level has so far been tepid at best.

However, it should be noted that gold did test towards the bottom of multi-year range from March 2020 last week, and sellers failed to stage a meaningful breakthrough under this key technical area.

If sellers continue to struggle to break under the $1,700 level then it is entirely possible that we could be about to see a major bounce back in the price of gold towards at least $1,790.

Should we see a range break under the $1,700 level then the consequences for gold price is quite dire. Gold could tumble by a further $200.00 if a range break did occur according to technical analysis.

Sentiment is dropping slightly now. The sentiment skew is getting less extreme, which is a positive force for a potential. recovery in the price of gold this week.

Current sentiment metric towards gold show that traders are getting less bullish. The ActivTrader market sentiment tool shows that 65 percent of traders are bullish towards gold.