Gold Price Rebound Raises Questions About Trapped Sellers
The gold price rebounded after the Federal Reserve's rate hike, raising questions about whether the initial selloff trapped sellers and opened the door to another leg higher.
In a recent video analysis by Itai Levitan of investingLive.com, he examined an hourly chart showing dip buyers stepping in after gold traded below $4,282. The price subsequently recovered above the hourly 20-period exponential moving average (EMA), supporting an early bullish scenario.
The Fed raised its target range by a quarter percentage point to 3.75%-4.00% on September 16. Levitan argued that if gold holds the recovery and breaks above the upper channel boundary, it could develop into a bull flag, a pause or pullback that eventually resolves upward.
However, he also noted that failure to hold the recovery, repeated rejection at the upper channel boundary, or a sustained return below the hourly 20 EMA would weaken the near-term bullish argument. Levitan emphasized the importance of protecting capital and taking profits deliberately in gold trading.