Gold Hunted By Bears

Intermediate
  • Gold has endured a dreadful week
  • The strength of the Dollar will continue to fetter gold
  • There was a small bounce on Friday afternoon
  • It was short-covering, the downtrend will resume on Monday

Gold prices endured the worst week of March by the time trading in the U.S. had closed. The metal was weighed down by a stronger U.S. Dollar as the Dollar Index gained 1.14% on the week.

This also proved to be the weakest month since August 2018 with the one-week chart suggested gold has developed a bearish reversal pattern.

Gold one week chart

Source: www.tradingeconomics.com , Spotlight Ideas

Should April prove to be a similarly disappointing month for gold, one may observe a dominant downtrend develop in the medium-to-long-term scenario.

Therefore, there is merit in looking at the weekly chart above. Last week, gold prices fell under a near-term rising support line that can be traced back to March 7th. This comes after failing to break above the resistance from gold’s top in February. One can see that there was an abrupt halt and reversal of fortune at 1330.92.

The decline last week was momentous in terms of speed; however, one must acknowledge that it found good support at 1291.53 and so end of week buying, (booking profit by covering shorts maybe), meant gold stopped short of breaking down to test older support at the range of 1276 and 1285.

I am looking for the selling pressure to resume on Monday and so opening the door for a test of the falling trend line from February as one can see in the one-year chart below.

Gold one year chart

Source: www.tradingeconomics.com , Spotlight Ideas

This opens the door to consolidation testing the next area of support at 1266, a psychological level going back to December 2018.

Summary:

Sell at the opening in the region of 1297 to 1296

Target 1 1266   Target 2 1234…but if market getting crowded happily cover at 1240

Stop at 1325  

Comments on this analysis


Latest News

Gold Chart
Golden Breakout: Potential for 1,486 for spot gold

We upgrade our neutral conviction on GOLD, mentioned in our prior post, to buy. Yesterday saw a solid 1.3% rise in XAUUSD on the back of a weaker USD, Middle East tensions and Ray Dalio comments. The precious metal broke above key 1,438.63 resistance and a consolidation pattern. A close near the top reinforces bull … Continued

GBPUSD Daily Chart
Elliott wave Analysis: GBPUSD On A Bearish Ride

Hello fellow traders! GBPUSD is looking bearish and can now be unfolding final stages of a sub-wave 3) of blue wave 1. We are observing minor leg 5 of 3) in progress, with possible support, and a turn into a corrective wave 4) around the Fibonacci ratio of 261.8 (1.235/1.223 region). GBPUSD, Daily On the … Continued

Forex News Category
Will Fed Easing Turn Out Like ’95 or ‘07?

You should completely understand that the market is dangerously overvalued and that global economic growth has slowed to a crawl along with S&P 500 earnings. However, you must also be wondering when the massive overhang of unprecedented debt levels, artificial market manipulations, and the anemic economy will finally shock Wall Street to a brutal reality. … Continued

Gold Futures
Gold Getting a Boost as Fed Expresses Concern

As the Fed indicate rate cuts are coming gold will keep rising over the summer  There is a disconnect between asset price inflation and the real economy  Earnings will be flat or disappointing and too much debt has little or negative yield  I last looked at Gold on May 26, 2019 when I called for … Continued


Forex Brokers in your location