Gold Price Analysis: Retreats to 200-HMA, bearish candle on weekly chart
- Gold has fallen back to key MA support with the US equity index futures turning higher.
- The metal's weekly chart shows scope for a deeper drop during the week ahead.
Gold has surrendered gains seen in early Asia and could revisit the Feb. 5 low of $1,548 during the week ahead.
The yellow metal is currently trading around the 200-hour moving average (HMA) at $1,570, having hit a high of $1,576 in early Asia.
The pullback could be associated with the positive turn around in the US equity index futures. At press time, the futures on the S&P 500 are reporting a 0.10% gain compared to a 0.5% drop seen in early Asia.
The safe-haven metal may continue to lose ground, as early signs of bearish reversal have emerged on the weekly chart.
Gold created bearish outside week candle last week, which occurs when prices drop engulfing the preceding candle's trading range (high and low). That candle represents bullish exhaustion and often precedes notable downturns.
The immediate support at $1,548 (Feb. 5 low), if breached, could cause more sellers to join the market, yielding a drop to $1,519 (Oct. 3 high). On the higher side, resistance is seen at $1,593. A close higher would open the doors to $1,611 (Jan. 8 high).