On the chart, the price of gold has made extremely strong gains in March so far and is now clearly overbought. The main challenge for potential new buyers here is estimating the timing and depth of the next consolidation or retracement. December 2023’s high around $2,140 seems like an obvious short-term support, while below there round numbers might be more important. There’s also the 0% weekly Fibonacci retracement, the area of last April’s high. The most important situation to avoid for short-term traders is being trapped in a losing position on a big corrective day like 4 December.
To the upside, $2,200 is an obvious short-term target which aligns with the 61.8% Fibonacci extension from last quarter’s upward movement. The equivalent 100% Fibo is around $2,320, but surely the price needs to consolidate or correct before reaching there. Tuesday’s American inflation could offer an entry to buy since the headline figure has consistently been higher than the consensus for a number of months. If that happens again, the price might decline temporarily.
To the upside, $2,200 is an obvious short-term target which aligns with the 61.8% Fibonacci extension from last quarter’s upward movement. The equivalent 100% Fibo is around $2,320, but surely the price needs to consolidate or correct before reaching there. Tuesday’s American inflation could offer an entry to buy since the headline figure has consistently been higher than the consensus for a number of months. If that happens again, the price might decline temporarily.