Gold trying to defend crucial support

09/03/2021

The bullion jumped on Tuesday and was trading 1.5% stronger during the US session as bears exited some of their short positions. Gold managed to jump back above the 1,700 USD threshold. 

Technically speaking, gold is now fighting for the last support zone, which is near 1,680 USD. 

The major bullish trend line is converged with summer 2020 lows, and it is the final demand zone before the long-term bull market is over. 

Therefore, bulls must defend this barrier at all costs. Otherwise, they risk a further decline toward 1,600 USD.

Alternatively, if gold finds the bottom there, it needs to stay above 1,700 USD for the short-term outlook to appear positive. 

Gold needs to climb above 1,770 USD for the medium-term trend to turn bullish again. Until then, it is a no man's land, and short-term volatility is expected to remain as US yields are on the rise. 

For bulls, gold's current price should be attractive, but bears will surely try to sell on rallies. 
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