Commodities

Technical Analysis – Gold plummets to a new 1-month low; bearish rally in progress

Posted on November 12, 2018 at 9:00 am GMT

Melina Deltas, XM Investment Research Desk

Gold dived to a fresh one-month low of 1203.83 today after recording six negative days in a row. The price seems to hold far away from the 20- and 40-simple moving averages (SMAs) in the 4-hour chart, which are sloping to the downside, endorsing the negative view. The Relative Strength Index declined to the oversold zone, indicating bearish sentiment, while the MACD oscillator is falling with strong momentum below the trigger and zero lines.

The significant leg below the 1206.58 support level, could stop around the 50.0% Fibonacci retracement level of the upleg from 1160 to 1243.30, around 1201.68, which holds near the medium-term ascending trend line. The next support level is coming from the 61.8% Fibonacci mark, which coincides with the 1192 support barrier, taken from the high on October 9.

On the other side, a move higher and above the 38.2% Fibonacci level, which stands near the 1212 resistance would likely retest the 1222.80 barrier but first needs to surpass the 20-SMA of 1220.24.

Overall, the yellow metal looks negative in the very short-term as it has been developing sharply lower over the last few days, while in the bigger picture, it remains above the rising trend line, which has been holding since August 16.

commodities gold

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