Gold Price Sharply Drops, Might See A Deeper Correction

The Gold price started its bullish rally after hitting the critical support at $1287.02, 24th May 2019. The bullish rally was capped by the resistance at $1611.95. Helped by the political crisis between U.S and Iran, Gold price managed to secure a record high on 8th January at $1611.95. However, the price of precious yellow metal sharply dropped. Currently, the Gold price is testing the support at $1559.25. If this support holds, the precious yellow metal might prepare for another rally. Breaking above the high of 8 January might result in an extended bullish rally in Gold price.

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On the downside, a break below the support at $1559.25 might push the price lower towards the next support at $1524.54. We might see some ranging market at that level. A daily closing of the price below that level might target the critical support at $1449.98. This level might refuel the gold bulls since we have plenty of supportive candles. Breaking below that level might result in a deeper correction in the price of gold. However, the recent growth in the U.S economy is slowed to a certain extent. So, geopolitical issues need to be intensified before you see such extended correction. Considering all the parameters, bearish tone stills favors the Gold price.Download our latest quarterly market outlook for our longer-term trade ideas.

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