Commodities

Technical Analysis – Gold looks neutral in near-term; develops in sideways channel

Posted on November 7, 2018 at 2:28 pm GMT

Melina Deltas, XM Investment Research Desk

Gold is currently trading within a consolidation area over the last month, with upper boundary the 1239 resistance level and lower boundary the 1212 support barrier. At the end of the previous month, the price reached a new three-month peak of 1243.30, endorsing the scenario for bullish tendency, however, it returned back to neutral mode.

In the short-term chart, the RSI indicator is sloping down and is ready to enter into the negative territory, while the MACD oscillator dropped below the trigger line and is hovering slightly above the zero line.

A fall below the 40-simple moving average (SMA) would probably stop around the 23.6% Fibonacci retracement level of the upleg from 1160 to 1243.30, around 1223.70, which stands near the 1222.80 support. The next level is coming from the 38.2% Fibonacci mark, which hovers around the 1212 key level.

On the other side, a move higher and above today’s peak of 1236.38 would likely retest the upper boundary of the trading range at 1239. Should bulls overcome that region, the focus would probably turn to three-month high of 1243.30.

Overall, the yellow metal looks neutral as it develops in a sideways channel in the near-term, while in the bigger picture remains in a bullish retracement following the rebound at 1160.

commodities gold

Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. XM accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The research and analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it.

It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests and to disregard any conflicts of interest in providing our services.

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all of your invested capital, so please make sure that you fully understand the risks involved.