The gold price had a strong comeback from its move below the $1,700 mark. It formed a double bottom there, and the subsequent bounce that followed puts pressure against the $1,900.
The precious metal enthusiasts are even more excited about gold’s performance since the digital assets have lost ground against the US dollar. In April, most cryptocurrencies have lost more than half of their value, following a report from China that it pushes against mining.
Also, inflation fears did help the price of gold on its way up. Inflation in the United States came out more than four times than expected, sending the dollar lower across the dashboard.
Gold has reached a new all-time high above $2,000 last year, but it has corrected back to $1,700, despite the dollar losing ground against its G10 peers. The current move higher is seen as strong enough to put pressure on the previous highs. However, the technical picture indicates a rising wedge pattern, threatening with a reversal.
From a technical perspective, the gold price remains constructive while above $1,840. That is a key area that, if broken, points to more weakness. A move below the $1,840 indicates that the rising wedge ended, and so bears may want to go short with a stop at the highs and a take profit into the $1,720 area.
Follow Mircea on Twitter.
