Gold at the $2000 level

Gold had been trading strongly to the upside since the beginning of March, rising from the 1810 price area to reach the 2000 price area which was last tested in April 2022. However, after reaching the resistance area, Gold retraced lower to test the 1937.50 support area which coincides with the 38.2% Fibonacci retracement level and the bullish trendline.

Currently, Gold is forming a double top chart pattern as the price again retraces from the resistance level at 2000. With the Moving Average Convergence and Divergence (MACD) indicator signaling a potential bearish reversal, a confirmation of further downside potential could be signaled if Gold breaks below the bullish trendline. This could see the price trade lower to test the 1917 level, and beyond that, the 1887 support level which coincides with the 61.8% Fibonacci retracement level. Significant moves to the downside on Gold is likely to be driven by a recovery in the strength of the DXY, due to its inverse correlation with the reserve commodity.

Alternatively, if the market uncertainty increases, arising from further developments in the banking crisis or increased concern over possible global inflation, Gold could trade higher beyond the 2000 resistance level, which would invalidate the double-top formation. A continuation of the uptrend could see Gold trade toward the next resistance level of 2070, which was last reached in March 2022.