Gold Cancels the Buy Signal and Enters the Bearish Territory

New week starts for us with the analysis of the Gold. Oh boy, that does not look good. The price is falling down like a rock. It is almost beyond imagination, as not more than two weeks ago, we were on the highest levels since April 2018. Previously, we talked about Gold on the last day of February and back in that day, we were bullish. We had strong reasons for this approach:

“Natural and obvious target was the lower line of this pattern. We reached that line yesterday and bounced from it today. Together with the dynamic support, we had a static one – on the 1315 USD/oz. This setup has definitely a great risk to reward ratio as the target lays on 1360 USD/oz.”

We indeed had a bounce from those supports but just a temporary one. The day ended with a decisive breakout and March started with a continuation of that drop. Momentum was and is very high. Sellers are not taking any prisoners and they do not waste time for a correction. We already broke two major supports: on the 1304 USD/oz. (orange) and 1296 USD/oz. (yellow). The first one is especially important as was a crucial S/R for the past few years. Price getting underneath that line means a cancelation of the positive sentiment and a triggering of a proper sell signal.

The current target for this fall is the 38,2% Fibonacci on 1275 USD/oz. Chances that we will get there are very high. With this kind of the momentum and the fact, that we did not have a correction yet, we may expect a small bullish bounce on that line.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis