Gold is trading under bearish pressure at around the psychological level of 1,700. During the Asian session, it had extended the rebound from the new low of 1,697.22 and reached 1,716 (-1/8 Murray). Later on, gold changed its trend and fell to 1,700.50.
From the all-time high of $2,070, gold has lost almost 18%. The other metals have also seen big declines, including silver which has tumbled 31%.
Gold is expected to consolidate above 1,700 again. If it manages to resume the technical bounce again, it could face strong resistance at 1,718 and the 21 SMA at around 1,722.
A sharp break of 1,722 (21 SMA) and a break of the falling wedge pattern could be a positive sign for gold and could be the start of a short-term bullish sequence. The price could reach 0/8 Murray at 1,750 and could even go as high as 1/8 Murray at 1,781.
The current outlook of holding above $1,700 is a positive sign, with stocks recovering ground and the US dollar under a technical correction. In turn, the yields of Treasury bonds are also going through a correction. This could benefit gold and it could rally to the strong resistance of 1,722. If it breaks this top, the price could accelerate to 1,750.
The market sentiment report shows that there are 85.26% of traders who are buying gold and 14.74% who are selling. As gold is showing signs of extreme overselling, a technical bounce is likely in the coming days until the percentage of buyers declines.
The eagle indicator is showing an oversold signal. It means that the metal is likely to have a technical bounce in the coming days.
