The gold price could have found a major support

Gold has moved lower in the Asian session but the sentiment is still strong after the yellow metal bounced back from the $1677.9/oz low. As traders and investors head into the European session the volume point of control (VPOC) at $1778.8/oz has been rejected and the price has moved lower. This does not necessarily mean the move down will continue.

There are still some important support levels to watch. The blue line at $1750.1/oz could be key as it provided support in the past and was sticky even as the price came back up recently. Below this, the main support is still the consolidation low on the chart from the higher timeframe. If that level ($1673.3/oz) is taken out there could be a more bearish sentiment shift.

On the upside, the next low volume node stands at $1791/oz and this coincides with the 200 SMA and a valid support and resistance zone. The triangle structure could also become a resistance. Often when chart patterns and trendlines are broken they are retested for confirmation. This will need to be carefully watched. There is clearly lots of traffic for a move higher but as geopolitical events around the world intensify maybe gold will have another moment to shine. 

By Rajan Dhall

For Kitco News