Gold Pulled Back Towards The $1975 Level

Key Insights

• Gold retreated as traders took profits after the recent rally. 
• Demand for safe-haven assets stays strong, and gold has a good chance to get back to the $2000 level. 
• A successful test of the resistance at $2000 will open the way to the test of the next resistance level at $2020.

Gold Moved Lower As Traders Took Some Profits Off The Table

Gold has recently made an attempt to settle below the support at $1975 as traders took profits after the recent rally towards the psychologically important $2000 level.

The U.S. Dollar Index has pulled back from recent highs, but demand for safe-haven assets remains strong. Most likely, profit taking is the main catalyst behind the pullback in gold markets.

Not surprisingly, this pullback put pressure on the VanEck Gold Miners ETF, which failed to settle above $41.50 during yesterday’s trading session and moved back below the $41 level.

At this point, this move looks like a normal pullback after the strong rally, so VanEck Gold Miners ETF should have a good chance to get back above the $41 level in case gold stays above the support at $1975.

Technical Analysis

Gold lost momentum and tested the support level at $1975. In case gold manages to settle back below this level, it will move towards the next support level, which is located at $1965.

A move below the support at $1965 will open the way to the test of the next support at $1950. If gold gets below this level, it will head towards the support level at $1935.

On the upside, the nearest resistance level for gold is located at $2000. In case gold manages to climb above the $2000 level, it will move towards the next resistance at $2020.

A successful test of the resistance level at $2020 will push gold towards the resistance at $2050. If gold settles above this level, it will move towards the next resistance at $2075.

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