Gold has been trying to string together a rally as of late, but its inability to get into gear suggests that recent strength is nothing more than a corrective move in an ongoing downtrend. Looking lower, there is a slope from March 2020 that will quickly come into focus.
The major level on the markets mind is around 1676, a level that began as resistance just prior to the onset of the pandemic. Since then it has been used as support on numerous occasions, with the most recent test coming during the August flash-crash (actual low then was 1681).
From a tactical perspective, would-be shorts may want to use last weeks high at 1781 as a threshold for assessing risk on stop-losses. This would leave good risk/reward for trades should we see gold test the big level in question.
For would-be longs, it appears prudent to be patient and wait for a better set-up before trying to fight the current tone and trend of the market.
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