Gold short-term bearish pressure before bullish continuation?
The price of gold could not surpass the $1,919 resistance level and currently trading lower. The weakness of gold prices incited by optimism that economic recovery will happen in 2021. This year, coronavirus vaccination is in progress and there is evidence that the rate of new infection and rate of death slowly decline.
Economy recovery could mean lower demand on gold prices but rising inflation could become the signal that gold prices will start moving higher. Recently, 10-year U.S Treasury yield continues to increase and that could lead the Fed to either tapering or interest-rate increase later.
Gold price was limited below $1,919 last month and there is bearish follow-through this month. The price supported near the top of the channel or the November-December low. It seems the consolidation will continue between $1,765 – $1,919 for now. Traders will wait for a breakout of the range for now. If a bearish correction continue then the gold price might target $1,500 – $1,550 area.
Gold price looks moving inside a triangle pattern. The price might continue consolidation inside the pattern for now. The next direction will be determined by the breakout direction. On the upside, $1,919 and $2,000 is the resistance level to watch. On the lower side, $1,500 – $1,550 might become the bearish target.
Gold price consolidates inside the bearish channel shown on the chart. It seems the price continues to stick near the top of the channel while continue to print lower low. There is no reason to switch to the bullish side for now until a bullish breakout happens above the top of the channel.
The overall trend continues to be bearish for the short-term, traders could see the price of gold continue making a lower low on the daily chart. However, on the longer time-frame, the gold price shows sideways movement and seems to wait for a bullish breakout.
At the current time, it is better to stay sideline and wait for strong momentum movement.