On Monday (October 28th), during the early European market session, spot gold was trading near $2740 per ounce. Although it continued to decline during the day, it was significantly higher than the intraday low.
Gold prices opened lower on Monday. During the Asian trading session, the price of gold once fell to $2724.64 per ounce, marking the intraday low.
Starting the trading week, gold prices weakened below $2750 per ounce. From a technical perspective, as long as it remains above the 38.2% Fibonacci level, gold prices still maintain a "buy on dips" trading pattern.
Looking ahead to today's trading, there are no high-impact data releases on the US economic calendar, so gold prices will continue to be at the mercy of risk trends. In addition, due to concerns about the situation in the Middle East, as well as US economic data to be released later this week, caution may prevail.
How to trade gold?
Gold prices have tested $2723 per ounce, which is the 23.6% Fibonacci retracement level of the rebound from the October 10th low of $2604 per ounce to the historical high of $2759 per ounce. If gold prices continue to break below $2723 per ounce, gold prices may continue to decline and fall towards the 38.2% Fibonacci level at $2700 per ounce.
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Looking further down, the 50% Fibonacci support level at $2681 per ounce will be challenged, which is also where the 21-day simple moving average (SMA) is located.
Spot gold daily chart
On the other hand, if gold prices hold the 23.6% Fibonacci support level at $2723 per ounce, gold buyers may attempt to test the psychological barrier at $2750 per ounce again. The next significant bullish target for gold prices is expected to be the record high of $2759 per ounce.
The 14-day relative strength index (RSI) has declined but remains above 50, currently trading near 64, suggesting that gold prices are still suitable for buying on dips at lower levels.
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