Gold: Bull market correction underway

The yellow metal is witnessing a bull market correction as is trading around $1,930, looking for a new direction after a quick trip lower last week. Next big move hinges on Jackson Hole Symposium, which will be held on Thursday and Friday, FXStreet’s Omkar Godbole reports.

Key quotes

“‘A key test next week will be the $1,890 region. If price can stay above that area next week it should provide near term support for gold,’ Giles Coghlan, Chief Currency Analyst at HYCM, told FXStreet.”

“Gold will likely resume the uptrend and revisit the record high of $2,075 if Powell signals greater tolerance for above-target inflation, fueling a deeper drop in real or inflation-adjusted bond yields and fresh sell-off in the greenback.”

“If Powell does not provide clear guidance, the dollar’s oversold bounce will likely gather steam. In that case, gold may find acceptance below the all-important five-month-long bull market trendline. That trendline support is located near $1,890, under which the focus would shift to the Aug. 12 low of $1,863.”

“A bullish-to-bearish trend change would be confirmed if sellers succeed in establishing a foothold under $1,863. That would establish a lower high and lower lows setup on the daily chart.”