Gold Bulls Search for Low/Uptrend Resumption
Heading into the start of Q4 we noted that gold prices were, “up more than 19% since the start of the year and while the broader outlook remains constructive, seasonal tendencies do not favor gold in the fourth quarter and the advance is vulnerable heading into October.”
Gold Price Chart – XAU/USD Weekly (Chart 3)
XAU/USD plummeted more than 7.1% off the September highs with the early-November decline marking the largest single-week loss since November of 2016 before settling into key support at 1451/56 in early December. The focus is on this key support barrier heading into the start of 2020 with season tendencies favoring gold into the yearly open. A break / weekly close below 1451 would risk another leg lower in gold with such a scenario targeting the 1433 backed closely by the 100% extension of the September decline at 1420 and the 38.2% retracement at 1405- both levels of interest for possible downside exhaustion / long-entries if reached.Initial resistance stands with the upper bounds of this embedded descending pitchfork formation / 61.8% retracement at 1488/92 – a breach / weekly close above this confluence zone is needed to validate a breakout of the September downtrend with critical resistance steady at the 1522/26 pivot zone.
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