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Trend Indicators Show Gold on Track for New Highs
Although gold prices are falling, they are still headed for new highs. During times of weakness, trend indicators like the 21-Day EMA and trend lines might provide assistance.
Gold retreats to a three-day low of 1,992 after closing the day at a fresh trend high. However, the upward trend continues, and gold is still headed for new highs. A number of trend indicators may be kept an eye on for indications of support during a downturn. Gold has a potential to go higher in the near future as long as it remains above the lines.
When gold is weak, support may be provided by the 21-Day EMA and trend lines.
The 21-Day Exponential Moving Average (EMA), depicted in orange on the chart, is the main trend indicator. The present rise has a possibility of extending before a further correction as long as gold maintains that support moving ahead. Another thing to look for are trend lines rising from the base of the pennant (little triangle) formation. There is still a potential for an upward continuation if price holds above the lines. More weakness is evident on a dip below the dashed uptrend line than on a retreat. While gold has already fallen below the 21-Day line after a loss below the bottom strong uptrend line, this is short-term bearish.
The 4-Hour Chart Makes Uptrend Price Structure Easier to See
The 78.6% retracement of the most recent upsurge provided intraday support for today's decline. The following 4-Hour gold chart shows it the finest. Here, the recent trend of higher swing highs and higher swing lows beginning in the second part of March is easy to notice. As long as the bullish uptrend pattern is maintained, that uptrend structure points to higher gold prices. The structure of the uptrend, in addition to the trend indications already mentioned, may provide further insight into when momentum and trend are shifting.
Changes in Trend Structure on a Drop Below 1,982
The structure of the uptrend is broken if the price falls below the most recent swing low at 1,982. The integrity of the pattern alters if it is broken to the downside since there are no longer any higher swing highs. Even if it's possible, this doesn't definitely imply that gold will decline. Instead, it is a character shift that can be followed by a deeper correction or a new pattern of trend or consolidation.
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