Since the beginning of this year, the price of gold grew by more than $50 per Troy ounce amid falling Chinese stock market. Due to increased worries on the market, investors are switching their funds into safe-haven assets, such as gold and the Yen.
However, this week the price is falling. On COMEX, January gold futures fell by 0.1%.
As stability will be returning on the market, demand for gold will be decreasing. Further pressure on the price will be put by strengthening US Dollar amid monetary policy tightening in the US.
Support and resistance
The pair found support near the level of 1090.00 (ЕМА50 on the 4-hour chart). Further fall towards 1083.00 (ЕМА200, ЕМА144 on the 4-hour chart, 2.6% Fibonacci correction) is expected, a breakdown of which would open the way towards 1051.00 (2015 lows).
At the same time, an upward correction could continue to 1116.00 (ЕМА144 on the daily chart, upper border of an ascending channel), 1120.00 (50% correction).
On the 4-hour chart, OsMA and Stochastic signal sales and start turning to sales on the daily chart.
Support levels: 1095.00, 1090.00, 1083.00.
Resistance levels: 1103.00, 1116.00, 1120.00.
Short positions can be opened below the level of 1087.00 with targets at 1083.00, 1061.00, 1051.00 and stop-loss at 1091.00.
Long positions can be opened from the level of 1094.50 with targets at 1103.00, 1110.00, 1116.00 and stop-loss at 1090.00.