Gold Price Bouncing But Remains in a Bearish Channel
Gold price bounced nicely from the lows as it reacted to dynamic support. The move higher came into the context of a lower USD across the board and Bitcoin breaking above the $20,000 level.
As such, one may conclude that gold has plenty or catch up to do and will go for a new all-time high as well. While that remains a possibility, traders should have a step-by-step approach.
After reaching an all-time high during the pandemic, gold corrected. It fell a few hundred dollars and kept making new lower lows. At the same time, any bounce was not strong enough to break the series of lower highs. Therefore, the current bounce may easily fit the same scenario – after all, the price of gold remains in a bearish downtrend.
With only a few days left ahead of the December holidays, gold depends on what happens with the stimulus talks in the United States. Thus, the dollar is key to gold’s direction in the second half of the year.
Gold Price Technical Analysis
Bears may want to remain short as long as the price stays in the falling channel. Only a break above $1,960 would invalidate the bearish trend as such a move would break the lower highs series. Anything in between represents an opportunity to sell with a stop at $1,960 and a take profit at the lower edge of the channel.