Technical Analysis – Gold bulls may rest after record high
Gold pulls below record high; might give up more ground
Market trend stays positive as long as price holds above 2,463
Gold lost momentum after unlocking an all-time high of 2,531 on Tuesday near the rising constraining line drawn from July’s low, but it maintained its resilience above the 2,500 psychological number by the end of the day.
The technical picture in the four-hour chart has started to show some cracks. The precious metal appears to have formed a bearish engulfing candlestick pattern at the peak of its upward movement, indicating a potential downward shift in the price. The indicators are beginning to trend downward, further validating the negative scenario.
Nevertheless, the price is still in a bullish channel, so any possible drop can be seen as part of the upward pattern unless the bears break below 2,463. Meanwhile, the market could find support from the 20-period simple moving average at 2,500 and the 23.6% Fibonacci retracement of the July-August rally at 2,489.
The 50% Fibonacci level of 2,442 could ease selling forces below the channel ahead of the 61.8% Fibonacci levels of 2,420, while a step below the ascending trendline at 2,400, which has been buffering downside movements since the end of June, could send stronger bearish signals if breached.
If the bulls stay active, their goal will be to pierce through the border between 2,537 and 2,555, with potential to continue towards the next barrier at 2,600-2,620. Slightly higher, the 2,650 region could be another hurdle.
In short, gold could become more susceptible to downward risks in the upcoming sessions. However, market sentiment would only be dampened if the price falls below 2,463, whilst a rebound above 2,537-2,555 could increase buying interest.Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.