Gold's Technical Tension: Navigating Between Support and Resist

Gold's recent price action reflects a market in a tug of war, with technical indicators painting a cautious picture. The CFDs on Gold chart reveals a struggle to maintain ground above the $2,020 level, a possible pivot point.

Technical analysis: The precious metal is currently testing the waters of the lower boundaries of its descending channel, with a short-term recovery being capped by this dynamic resistance. The rebound off the $2,018 support level has been met with skepticism, as the price hovers near the $2,035 region, showing the market's hesitancy. Should Gold convincingly break and hold above this area, it could be a signal of changing tide, potentially aiming for higher resistance levels. Conversely, failure to breach this line may see prices sliding back to retest the lower bounds around $2,018.

Our position: With the market weighing every bit of economic data, a conservative approach is prudent. Traders might consider a 'wait and see' strategy, looking for a clear directional cue. A breakout above the trendline might provide a bullish signal, inviting long entries, while a dip below $2,018 could prompt a bearish outlook. However, the deciding factor will be this week?s CPI report coming from the US, which will give us a more clear hint on where the market will move.