Gold started the new quarter hitting fresh record highs, following a massive first quarter during which it rallied 19% and broke lots of milestones, including surpassing the $3,000 mark. Later in the week, there is a chance for gold to at least pause for a breather – especially if President Trump opts for a softer stance on tariffs, opines Fawad Razaqzada, technical analyst at Trading Candles.
In recent days, Trump’s latest tariff escalation has sent ripples across global markets. The price of gold continues to find support amid haven flows as equities remain volatile on trade war concerns. But how much further can gold rise before staging an inevitable correction?
I think a lot of people had $3K+ penciled in as their target. But as of yesterday, we were well above the $3K level – at almost $3,150 following a four-day rally. Some profit-taking should be expected at these levels, but that alone will not cause a meaningful drop in prices.
Meanwhile, the fact that gold is technically overbought on multiple time frames, including the long-term charts, hasn’t been enough to slow the rally yet. This goes to show that no lagging indicator is reliable and what matters the most is price itself.
Gold continues to make higher highs and higher lows. That’s the most important thing. Until such a time that it stops making those higher highs and higher lows, there is no point in trying to pick the top. Therefore, gold remains in “buy-the-dip” mode, and one should just concentrate on support levels where one can take advantage of those dips.
With that in mind, here are a few support levels to watch for potential trading opportunities:
- $3,127: Monday’s high and first line of defense for the bulls
- $3,086: The high from Friday and also of last week
- $3,032-$3,057: The last area of resistance prior to the recent breakout, making it a key support zone to watch for the dip buyers
- $3,000: This is a psychologically significant level and the fact we are holding above it confirms bullish control. A potential break below this could trigger long liquidations until prices potentially reach $2,930-$2,956. This zone, the former breakout area, also aligns with a trend line, making it the next major support area to watch.
