Gold’s rebound from Tuesday’s lows suggests that there is a strong support area at the $3,290-$3,300. The precious metal is trimming previous losses on Thursday, buoyed by a more favourable context, with US Treasury yields and the US Dollar tumbling.
The easing geopolitical concerns have undermined demand for the safe-haven Gold this week, but the yellow metal is drawing support on Thursday from US Dollar weakness on the back of increasing concerns about the Federal Reserve’s independence.
US President Donald Trump called Fed Chairman an “average mentally person”, after Powell reaffirmed his cautious stance towards further monetary easing, and aired the possibility of announcing his replacement way before the end of his term. The market has seen this move as a clear threat to the bank’s independence, which has brought the “Sell America” trade back to the table.
Technical analysis: In a bullish correction within a broader bearish trend
The rebound from Tuesday’s lows at $3,295 has extended beyond the $3,340 previous support (June 20 lows), confirming a deeper bullish correction. The pair night be on a C-D leg of a small Gartley pattern, heading to the descending trendline resistance from mid-June highs, at $3,450, now at $3,365.
A confirmation above this level would signal a trend shift and move the focus towards the $3,400 area, which capped bulls on June 17, 18, and 22.
On the downside, a rejection at the mentioned trendline might seek support at the intraday low $3,330 ahead of the previously mentioned $3,295 (June 9,24 lows)
Source: Fxstreet
