Commodities

Technical Analysis – Gold tumbles inside Ichimoku cloud; bearish in short-term

Posted on July 1, 2019 at 8:35 am GMT

Melina Deltas, XM Investment Research Desk

Gold prices have reversed back down again after finding resistance at the six-year high of 1439 at the end of the preceding month.

Currently, prices are developing within the Ichimoku cloud and the red Tenkan-sen and the blue Kijun-sen lines are pointing down, suggesting more losses. The 20- and 40-simple moving averages (SMAs) posted a bearish crossover in the 4-hour chart, while the stochastic oscillator and the RSI are heading towards the oversold zone.

Further losses should see the 38.2% Fibonacci retracement level of the upward movement from 1275 to 1439 near 1376. A drop below this level would reinforce the short-term bearish sentiment and open the way towards the 50.0% Fibo region near 1357.

In the event of an upside reversal, the 1400 handle, which overlaps with the 23.6% Fibonacci mark could act as significant resistance before touching the bearish cross of the SMAs around 1408. A run above these levels would drive the yellow metal towards the 1424 hurdle, taken from the latest highs.

However, for a resumption of the last month’s bullish rally, gold prices would need to beat the six-year high of 1439.

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.