Rebound Faces Immediate Resistance
Gold bounced into resistance near the 100-day moving average during Wednesday’s session, hitting a three-day high of $4,603. A close above Tuesday’s high of $4,536 would confirm the bullish reversal. Gold is bouncing following a sharp four-day decline of 18.3%, which ended with a low of $4,099 on Monday. The possibility of a counter-trend rally in response to the sharp selloff may have begun today, potentially marking the start of a recovery phase following the recent corrective decline.
Fibonacci Support and Channel Test
In addition to support indicated by the 200-day moving average, the decline completed a 61.8% Fibonacci retracement near the lows and tested the midline of a rising trend channel. Although the midline may not carry the same significance as the outer boundary lines, price can still respond to the area, as it did on Monday. This suggests that a possible low for the bearish correction may have been established, referencing the potential for a rebound.
Long-Term Trend Remains Intact
The 200-day moving average continues to define the lower boundary of the long-term bull trend. Bullish momentum has been improving since September, as reflected in the accelerating slope of price action. The strength of the advance can be seen in the relationship between the 200-day moving average (blue) and the lower trendline of an ascending channel, with the average rising away from the trendline over time. Given the successful test of support near the 200-day line this week, longer-term bullish momentum is being reaffirmed, further highlighting that average as a key trend indicator.
Key Resistance Zones to Watch
Despite short-term signs of strength, the reaction of price near prior support of the 100-day moving average, now around $4,614, and the upper boundary of the ascending channel (estimated $4,659 today), will provide the next key clues. These levels previously acted as support and may now turn into resistance. If resistance is seen on an approach from below, it would signal weakening short-term sentiment, potentially leading to another test of support near the 200-day average or other nearby support zones noted above.
Upside Hurdle Defines Next Move
A decisive advance above the two trend indicators would signal strengthening bullish momentum. However, the 10-day moving average is declining rapidly and represents the next key upside hurdle. It is currently near $4,749 and aligns closely with a recent lower daily high at $4,736, establishing a near-term resistance zone. How price reacts at that level could help determine whether this rebound evolves into a sustained recovery or remains a temporary counter-trend bounce.
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