Gold price has experienced an upsurge on the day, which is a spinoff of the retail pump activity on silver. Lately, several assets have become battlegrounds for retail traders who have come together to use their strength in numbers to outdo the institutional trading firms who have lesser numbers but more financial volume. So far, the retail traders appear to be winning, and the gold price activity and that of silver appear to support this notion.
However, it is unclear if this rally will last. A member of WallStreetBets, the Reddit group that initially started the confrontation with the institutional firms, has been reported as saying that attempting a GameStop-style short squeeze on silver was a bad idea.
Fundamentally speaking, the US Dollar is also seeing some offers after it was reported that US President Joe Biden was to meet with Republican senators to work out new stimulus packages. This is supporting gold prices at the moment.
Gold price is currently trading 0.8% higher, slightly off intraday highs.
Technical Levels to Watch
Today’s upside in gold price on the XAU/USD daily chart appears to have met resistance at the junction formed by the large descending channel’s upper border, and the 1869.39 resistance level. A rejection at this point could initiate a pullback towards 1850.78. A breakdown of the 1850.78 support also breaks down the smaller ascending channel, opening the door to a further downside move that targets 1821.55 and possibly 1800.34.
On the other hand, if gold price breaks above the current resistance level, then 1881.99 becomes the new target. If price pushes above the smaller channel’s upper border, we could see 1900.76 becoming a new target, along with 1918.68.
Gold Price (XAU/USD) Daily Chart