Gold Defends Key Horizontal Support

By Tomasz Wisniewski|

Published: November 04 2022, 08:49 GMT+0

Gold Defends Key Horizontal Support


The appetite for commodities influenced by rumors from China that it will be ending its zero-Covid policy is helping Gold. And when we look at the chart, we can see that, boy, Gold really needed that help.

Gold is one step from a major trading signal. Which way will this trading signal go, well this is what we are about to find out.

This week was crucial as XAU defended the long-term bullish stronghold on the 1617 USD (yellow). For the third month in a row, buyers are using this level to initiate a correction, so far with success. It’s clear that the breakout of that level will mean a long-term sell signal. That’s scenario A.

If there is a support, there is always a resistance. XAU has two of them. The first one is a horizontal one on the 1680 USD/oz (orange) and the second one is the long-term down trendline (black). The breakout of those two will definitely be a great bullish sign, an invitation to a new up trend and our scenario B.

Which one will Gold choose?

Well, I always believe it’s not about guessing or predicting but more about reacting and following the move. In this case, the best option is to wait for the breakout and then jump in the right direction, once the price shows us its intentions.