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Gold technical analysis points to lower levels for now

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(Kitco News) - After a great start to the last week, gold managed to lose some of its shine after some impressive data from the U.S. in the form of retail sales. Now $1800 seems to be a bit of a line in the sand and the bulls need to gather some momentum for another break and close above the psychological zone.

The price is right now in a support area at the blue shaded zone. This area was used to good effect as a resistance zone back in April 2020 before the price moved to the all-time high. Below that, the strongest level seems to be the red consolidation low. If the price breaks there it enters the abyss as there is not too much support heading into the next consolidation.

On the topside, there is a bit of traffic. The orange trendline now has three touches and any break would be a good sign for the bulls. Beyond that, the purple trendline is the next important technical level and any break there could mean a retest of the $1919.2/oz wave high is on the cards. Another stubborn horizontal resistance is the green shaded area near $1834/oz but at the moment the price is struggling to get beyond $1800/oz so it seems safe for now. All in all, downside levels are in focus and PMI's at the end of the week could rock the boat slightly but we will have to wait and see.

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