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CFD News: Gold signs of demand after trend break

Published: 31.01.2022
by Joseph Jeffriess

Hi traders, focus is on gold today as we watch demand and support levels continue to develop.

Gold took a mighty dive last week after the USD took flight sinking risk markets in its wake. Gold was looking good, trading up to $1850 before momentum shifted. The move looks to have cancelled out the last short to medium-term uptrend. Price lost 3.66% in three sessions, closing out the week at 1791.68.

The low of Friday’s bar showed some signs of demand and, so far, we’ve seen further demand come in from the same area 1785 – 1789.50. This level continues to look interesting for buyers, as not only are we seeing a demand area in play but we can see new support that was previous resistance. Can this counter out the trend break?

We feel short term fortunes will remain pegged to the USD and a small technical fightback could set up, but will it carry through? If the USD can find new upward momentum we think pressure will return to the levels noted today. We will continue to look for buyer demand while the levels remain in play. A break of demand and support suggests sellers still have ground to take back. We will also be more confident in seeing a new higher low above or on the demand area to show any buying is not just a standard counter-rally in a down move.

News and data-wise, we have US manufacturing, services PMI data and US employment data due this week.

Gold Daily Chart

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