Gold Technical Outlook Remains Clouded
Gold has been declining since August 2020, and has yet to show any real signs of life. That could change in Q2, but it may not provide any longer-term directional cues as the push-pull battle continues. A big picture bull-flag remains in the works. However, the pattern is losing its luster. To see the flag shape up a rally is needed soon towards the top-side trend-line of the formation.
A rally to the upper threshold of the pattern will only keep it in play. For a broader advance to commence a break above the top-side line and into the 1900s is needed. Could we get that in Q2? Anything is possible, but it doesn’t appear to be as likely a scenario at this time.
On the downside, there is a lower trend-line (it makes up the lower part of the would-be bull-flag) that may continue to be a source of support. But if price continues to fall much further from here the integrity of the bull-flag diminishes quickly.
All-in-all, the broader technical outlook is in limbo with a downward bias at the moment. Gold is in a difficult spot right now and some work is needed if it is to turn its bearish course back to bullish.
Gold Weekly Chart (Diminishing Bull-flag)
