Gold markets initially tried to rally during the week, slamming into the $1300 level. However, we were repelled there rather quickly, and then turned around to fall rather precipitously. With this in mind, this is not a good look for gold.
Gold markets initially tried to rally during the week but found so much trouble at the $1300 level that we have given up $25 in roughly 2 days. That’s a pretty decent sized move for gold, so it shows real bearishness. If we can break down below the $1268 level, that would be a very technically negative sign, both the weekly and the daily charts would agree at that point. I believe that the next target would be $1250, followed by the $1225 level, and then eventually the $1200 level.
There is absolutely nothing on this chart that looks healthy at the moment, and I could even make a bit of an argument for a descending triangle if I was to be just a little bit lax with my trend line placement. Remember, technical analysis isn’t necessarily always going to be precise, and I’m sure plenty of people out there see the same thing I do.
That being said, if we were to turn around and break above the $1300 level it’s likely that this market would go much higher, perhaps reaching to the $1325 level next. In the short term though, this is a market that I think will continue to attract plenty of selling pressure, so although I believe that it’s a longer-term move lower, you may have to look to shorter-term charts the place your trade. There’s nothing wrong for a longer-term trader to be looking at shorter-term charts to fine tune their entries. This might be a perfect example of that.
Please let us know what you think in the comments below
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.