Gold stays on the corrective path, when will buyers emerge?

<p>It has been quite a straightforward downside move in gold after the break of its 100-day moving average (red line) earlier this month. Price is now down 0.1% to $1,905 levels as sellers stay on the hunt of a push towards the $1,900 mark:</p><p>The correction after approaching the 2020 and 2022 highs near $2,070-75 is still ongoing as the dollar also regains its poise in the past two months. If you need a reminder, gold was one of the main beneficiaries of the whole banking crisis this year (with the dollar one of the biggest losers).</p><p>The repricing of Fed odds from three rate cuts this year to a higher for longer perspective has been a key theme in dragging gold lower since.</p><p>But have we reached a limit on the hawkish scale now? Perhaps. The Fed funds futures curve is seeing a peak in rates at about 5.37% currently and that is just slightly higher from two weeks ago around 5.30%.</p><p>So, while there is still a higher for longer view in markets, we're not exactly running towards pricing in 6% rates just yet.</p><p>A lot will come down to what the Fed does next in July but there's still a whole month to go before we even get to that.</p><p>In the meantime, the technicals are the best gauge to try and work out a bias in gold and for now, sellers are still in charge of the swing of things.</p><p>We are seeing a test of the 61.8 Fib retracement level of the swing higher from March to May at around $1,904.88. So, that will act alongside the $1,900 mark as being a key support barrier for gold in the sessions ahead.</p><p>But if we do get a break of that region, expect price to drop further towards the 200-day moving average (blue line) – seen at around $1,856 currently. Personally, that is where I feel gold will have stronger support as it does present a rather attractive price point and technical level for buyers to lean on in search of a rebound in the big picture.</p>

This article was written by Justin Low at www.forexlive.com.