Gold Tries To Gain Ground As Dollar Pulls Back From Highs

Key Insights

• The U.S. dollar declined from recent highs, providing some support to gold markets. 
• VanEck Gold Miners ETF remains under significant pressure. 
• A move above the nearest resistance at $1890 will push gold towards the next resistance level at $1900.

Gold Attempts To Rebound After Sell-Off

Gold is currently trying to settle back above the $1880 level as it tries to recover after the recent sell-off.

The U.S. Dollar Index has recently made an attempt to settle above 103.60 but failed to gain additional momentum and declined towards the support at the 103.25 level.

These levels were last seen during the acute phase of the coronavirus crisis. The current rally is extremely strong, and it’s not surprising to see that the dollar has finally faced some resistance due to profit-taking. The potential pullback of the American currency could could provide gold markets with an opportunity to rebound from recent lows.

Meanwhile, VanEck Gold Miners ETF continues to move lower. Yesterday, GDX managed to settle below the support level at $35.00. In case gold fails to settle back above the $1880 level, VanEck Gold Miners ETF would continue its pullback during today’s trading session.

Technical Analysis

Gold made an attempt to settle below the support at the $1880 level but failed to develop sufficient downside momentum. In case gold manages to settle back above this level, it will head towards the resistance at $1890.

A successful test of the resistance at $1890 will push gold towards the next resistance level at $1900. A move above this level will open the way to the test of the resistance at $1915. In case gold climbs above this level, it will test the 50 EMA at $1920.

On the support side, a move below $1880 will push gold towards the support level at $1865. In case gold manages to settle below this level, it will head towards the next support level, which is located at $1850. A successful test of the support at $1850 will open the way to the test of the next support at $1830.

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