Gold is Dropping in a Profit-taking Wave

 By Deya Hroob

Gold prices fell today, as the strength of the dollar outweighs on the support resulting from the US Congress's approval of a long-awaited aid package of nearly $ 900 billion linked to the Corona virus.

 

Gold fell by 0.3 percent to $ 1860.69 at the time of writing.

The market witnessed some profit-taking deals after the United States approved a stimulus package and the rise of the dollar.

 

Gold has risen 23 percent this year, mainly driven by a series of stimulus measures due to the pandemic, raising fears of inflation. The precious metal is often used as a hedge against inflation.

 

Technically :

On the daily chart, the price failed to break out the downtrend line on many occasions, which pulled the price down to 1860 support.  If the bulls succeed to break this level a move to 1950 is likely.

However, if the price again turns down from the resistance zone a fall to 1840 level  is possible and below it 200-day EMA will be the next support.

 

On one hour chart, I used a Volume  Profile Indicator to find a possible resistance level. As you can see from the chart $1880 is now acting as  resistance level. This price level comes with the highest traded volume within this period of time.

 

Trade Wise and Good Luck,