Anything above 2,339 indicates strength
Another trendline and the 50-day moving average point to higher potential resistance near 2,339. That said, gold is likely to continue in retracement until it sees a rise above the swing high of 2,369. As the week ends, this week’s high, along with the 50-day line, provide a key lower price level for the upside. If gold can rise above the swing high of 2,369, it will be in a position to continue up from there. The overall view remains bullish and the current retracement should eventually reverse to an upside. It remains to be seen whether it will drop first.
Key support is the weekly low of 2,294
A decisive drop below this week’s low of 2,294 would suggest a continuation of the retracement. The swing low of 2,287 and the recent support levels of 2,277 would then be tested. The first downside objective is the 61.8% Fib retracement at 2,262. A break below this level could send gold prices plummeting to the 78.6% Fib retracement near 2,211. This level is the beginning of a potential support range derived from the resistance zone during the March rally. Notice that the uptrend line, which previously provided support, is now passing through the support zone.
RSI Trendlines
Or, as we can see today, gold breaks below a key level but continues its slow decline, followed by a bullish reversal after breaking below support. The Relative Strength Index (RSI) momentum oscillator has a three-point trend line and a potential double bottom. While this is a secondary indicator, if it breaks above the line and forms a double bottom, it is evidence that demand for gold is improving.
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