Gold futures are continuing to hold their shine as February trading volumes show steady signs of improvement this week. Despite the choppy short term trade, gold's launch from the $1,550 per ounce level to the most recent swing highs near $1,730 per ounce has the bullish camp excited for more gains to come. Those looking to accumulate long positions on a pullback may have an opportunity to do this week, as Autochartist spotted an approach to key level support currently underway.
The key support level helps to identify where the current pullback is likely to find buying action. Conversely, a failure of a key support level can signal new weakness developing and portend a more significant move lower. Gold's healthy uptrend is now giving way to retest the $1,717 per ounce level. This level may well see buyers coming back into the market to run the range back to the swing highs at $1,735 to further establish a base from which gold can rally to new highs. A sell-off below the key level would invite a technical correction to the previous swing low near $1,705 per ounce, which would require new bullish patterns to develop on Autochartist to reinvigorate the short-term buying prospects.
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