is bottom in? Gold could see an upward correction, bouncing off $1,700 – Moor Analytics

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(Kitco News) – Gold’s drop from March highs at $2000 an ounce has done a lot of technical damage and pushed gold into a downtrend; However, according to one technical analyst, the precious metal may be on the verge of establishing a new upward movement in the short term.

In a recent interview with Kitco News, Michael Moore, founder of Moor Analytics, said that gold consolidation at around $1,700 an ounce in recent days may indicate that the market’s bearish momentum is over.

He noted that gold has maintained critical levels of technical exhaustion just below $1,700 an ounce.

“With the selling this year, we have violated every upside, so where the market now stands, the bias is still bearish. However, we can see an upward correction in the near term,” he said.

Moore added that it is too early to determine whether the bullish correction has the potential to hold the current trend. He said one of the signals he is looking for is to see if gold prices could return to above $1800 by mid-August.

Moore also said that although gold has struggled for most of the year, it could still return to highs above $2,000 an ounce if $1,700 held as support. He said the base price to watch would be around $1,850 an ounce.

“If gold breaks above $1850, it will take out another major bearish pattern and you will already be above a bullish pattern. To me, that would indicate that there is a good potential to take this rally to higher levels again,” he said.

However, on the downside, Moore warned that if gold prices drop below $1,686, the precious metal could see further sharp losses.

“The next big exhaustion is down $1,564.3 an ounce,” he said.

Regarding how the current gold market plays out, Moore said that investors should consider taking a more conservative trading approach, building a position and taking some profits from the rally to resistance points. He added that he sees initial resistance at $1,789 an ounce.

“When gold drops to these exhaustion levels, you want to buy and then in the first wave you sell part of your position. That pays for stocks and the other half of the position,” he said. “When the market breaks every bullish formation, you can add your base position.”

The bullish outlook for Moore in the near term comes as gold prices continue to maintain support at $1,700 an ounce. August gold futures were trading at $1,709.20 an ounce, up 0.5% on the day.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, Kitco Metals Inc. cannot. Nor does the author guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to conduct any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. does not accept The author of this article will be liable for losses and/or damages arising from the use of this publication.

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