Gold: Is Support Starting to Form?

February 24, 2023
by Joseph Jeffriess, Market Analyst

Happy Friday, traders. Today we are looking at Gold from a technical perspective on the short term as buyers continue to push off a support area and from a potential demand zone.

Price, for now, has continued to see demand from 1820.90, and sellers have failed on two attempts to break through. This level also sits in a possible supply zone that corresponds to the bar on the 21st of December, 2022. A supply zone can point out an area that can form support and lead to a reversal. I’m by no means an expert on supply and demand zones, so please be aware of that. What I like about this is the fact that two points have lined up in the same area.

Price still remains in a downtrend, and the last few candles have seen failed attempts to hold close to their highs. These are counter bearish signs and need to be taken into consideration. From here, we want to see buyers hold today’s rally, and the higher the close, the better to tell us that buyer numbers are increasing.

If we see a solid close today, that could be a sign that buyers are trying to regain control. A break of the trendline would be another solid sign. We need to see buyers hold 1820.90 support as if price is below that level. We could see a new bearish continuation.

Another factor is the USD core PCE price index data will be released later today, and it is expected to come in at 0.4%, 0.1% higher than the last data. Inflation and rates continue to be a driver, and a miss or beat could impact the USD and Gold. The PCE will be released at 8:30 am EST.

Gold D1 Chart

Have a great weekend and good trading.

All times are AEST.