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Technical Analysis

Gold Price Approaching an Important Set of Levels

17-Nov-2022 20:53:23

Spot gold (XAUUSD) has been on its best run in quite some time, bringing into play the possibility of hitting an important area of resistance. There is confluence between the 200-day MA and the August high at 1807.75.

This would be a good spot to look for a reaction out of gold and for a pullback to develop at the least, if not more. Just looking at the pullback scenario a decline down towards the 1730 area where support from September and October lie could be in the works soon.

Whether that support holds on a pullback is of course yet to be seen, but could be perhaps a good spot for dip-buyers to look to establish positions. If price does run into resistance, from a tactical standpoint, those already long may look at tightening up risk, and for would-be shorts it could offer a good spot to fade the rally.

Looking at the big picture, if the dollar-on, risk-off theme comes back into play again, a scenario I see as likely to happen, then it is hard to imagine gold being capable of continuing to truck higher. But if we don’t see the dollar-on/risk-off theme resume then gold is in good shape.

And it is possible as the macro landscape evolves we see gold start to operate a little more freely from the dollar-on/risk-off theme and buck the trend. Time will tell, but for now sticking to the near-term scenarios outlined above and see how things shake out before drawing any further conclusions.

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