The price of gold (XAU / USD) is retreating from the weekly highs of 1,771 near the 200 EMA. Gold was trading above the downtrend channel for a few hours. It seemed to be a sharp break, but if gold returns to trading below 1,750, it will be a key sign that the metal has regained the bearish movement and the price could fall to the support at 1,725 and 1,718.
However, gold could lose its appeal as a safe haven, as concerns about rising inflation, the debt ceiling of the US, and debt-laden Chinese real estate companies will continue to support the demand for the safe haven of the US dollar.
Therefore, a close below 4/8 of a murray in the 4-hour chart may increase the downward pressure, so gold could fall to the level of 1,740 and 1,721, the low of September 30.
The short-term outlook for gold is seen on the negative side. With a bounce from 1,1721 to 1,771, gold has recovered about $50. Nevertheless, this price action has not been enough to break the 200 EMA, which acts as a strong dynamic resistance. Therefore, if this pullback continues and the price consolidates below the main bearish channel, it will be a sign of a new bearish wave.
On the other hand, if gold rebounds above 1,750, the 4/8 pivot point level will be a good point to buy with the target limited to the 200 EMA at 1,775.
So, the key level to watch is the SMA of 21 located at 1,755 and together with this 4/8 of murray. A movement of gold below or above will determine our trading strategy for the next few days.
Support and Resistance Levels for October 05 - 06, 2021
Resistance (3) 1,784
Resistance (2) 1,775
Resistance (1) 1,762
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Support (1) 1,750
Support (2) 1,739
Support (3) 1,731
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Trading tip for GOLD for October 05 - 06, 2021
Buy if gold rebounds above 1,750 (4/8) with take profit at 1,762 and 1,775 (EMA 200), stop loss below 1,745.
Sell if there is a pullback from 1,775 (EMA 200) with take profit at 1,762 and 1,750 (4/8), stop loss above 1,781.
