The gold price staged a strong recovery on Thursday afternoon. It fell sharply initially, trading down to $3,120 – its lowest level in close to five weeks. But it went on to stage a decent rally, which took gold back above $3,250, the day’s high, and the close.
But it pulled back below $3,200 again in early trade on Friday, and it looks like a coin toss to decide short-term direction. Looking at the chart, the yellow metal continues to run into resistance at $3,250 while support comes in, rather neatly, around $3,150 – a level which previously acted as resistance at the beginning of last month.
The daily MACD has pulled back sharply from the seriously overbought levels around mid-April, when the gold price hit a fresh all-time high of $3,500. It is now hovering just above the neutral area, but pointing down, suggesting that momentum remains to the downside.
But the MACD is also back to levels from which a fresh leg in the rally could begin. Much will depend on how the precious metal behaves in the early part of next week.
Source: TN Trader
Silver was also down on Friday. It broke down below $32 yesterday (the lower end of its recent trading range) but rallied back up along with gold. It has remained relatively stable compared to gold, having spent the last four weeks mostly consolidating between $32 and $33 per ounce.
