The precious metal had a rough trading session where it momentarily lost 4.5% in the session, the most significant loss in a single day since January 8th, 2021.
Gold’s price managed to break three support levels in only two trading sessions, including the 50% retracement, which is often a strong trend indicator for many investors. The price recovered some of the lost ground the same day and closed with only a 1.89% loss, right above the 78.6% retracement.
Generally speaking, the price is now on a downtrend; it broke the 50% retracement, and the short and long-term moving averages crossed earlier this month.
The relative strength index is currently oversold at 28%; we expect investors to react and start buying the dip in the short term; this could bring the price up a few points, allowing the RSI to recover to continue its downtrend eventually.
Our parabolic SAR indicator suggests that the price will continue its downtrend; however, we might see the price pullback before that happens.
The Bollinger bands opened up aggressively during the last three sessions, bringing higher volatility to the pair. Since the pair trades below the lower band, we can interpret that the price is relatively low, which is why we expect the price to go up in the short term and continue the downtrend in the midterm.
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