Gold Price Forecast: Gold Test of Key Support Leads to Resistance Rally

[MongiIG]

Jul 25, 2022 | DailyFX
James Stanley, Senior Strategist

GOLD TALKING POINTS:

• Last week was the first green weekly bar in Gold since early-June, and this happened after a test of major support around current two-year-lows.
• The FOMC rate decision on Wednesday is the big driver on the economic calendar and already Gold prices are testing the first zone of resistance, as taken from prior support.

Gold prices have seen prices continue to slide this summer, with last week finally bringing on that test of key support in the 1700 area. While prices did test below $1700, they didn’t cross the swing-low from last-August. Instead, buyers stepped in just before that price could be tested and that’s so far led to a slingshot-like retracement. That support test happened last Thursday and that was followed by a strong bullish response into last week’s close.

Thursday price action closed the daily bar as a bullish engulf and Friday saw continuation as prices jumped straight into the first zone of resistance, an area plotted from Fibonacci levels at 1723-1733. So far through the weekly open that zone of resistance has helped to hold the highs but sellers haven’t exactly taken-advantage of the situation just yet.

GOLD PRICE CHARTS