Gold prices have seen a sharp intraday reversal, erasing early gains to trade firmly in the red. The turnaround followed reports that central bank reserves might be sold to fund defense spending.
Currently, Gold is trading at $5,105, down $35 (-0.65%) on the day.
Technical Breakdown: The Resistance Wall
The early session rally hit a familiar wall at the 200-hour moving average (MA), currently situated at $5,203.
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Rejection: The daily high reached $5,195 before sellers stepped in.
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Context: This moving average has acted as a consistent ceiling since Tuesday, when the metal broke below its lower channel trendline and the 100-hour MA ($5,230).
Shift in Bias: Floor Becomes Ceiling
The recent downside rotation has forced the price below a key support level at $5,116.
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Failed Support: This level had served as a “floor” since yesterday, with buyers defending three separate attempts to break lower.
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The New Reality: With the price now trading below $5,116, the short-term bias has tilted back to the bears.
The Road Ahead
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The Bear Case: If momentum continues, traders will eye the $5,000 handle, which aligns with the 50% midpoint of the recent range and Tuesday’s swing low.
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The Bull Case: For the bulls to regain confidence, Gold needs a sustained move back above $5,116 and the 61.8% Fibonacci retracement level. Only then can the market look for another test of the 200-hour MA.
This article was written by Greg Michalowski at investinglive.com.
