Gold has had a sharp selloff, falling about $30 in the past two days. Yesterday selloff saw a confluence of hitting a price objective/resistance level at 917.50 and a momentum sell short day.A couple of traders have asked my opinion for gold here; let’s take a look.
Entering today’s session, momentum (the bottom panel of the chart) was not yet at a level to give a buy signal, so downside follow through should not have been a surprise.Today’s decline accelerated when the 900 to 899 level was taken out; 900 is psychological support, 899 is a Fibonacci retracement level. From here I’d be looking for a buying opportunity in gold. Momentum has now dropped to a buy signal.I’d consider two potential entries; either on a retest of the 61.8% retracement level at 886.30, or buying a close over the 50% retracement level at 892.70, anticipating a buy day rally tomorrow. Resistance and objectives for the rally are the same 899 to 900 level, then 902.
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