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Gold Prices Trend Lower in the Short Term

Gold Prices Trend Lower in the Short Term

Walker England, Forex Trading Instructor

Talking Points:

  • Gold Prices Trend Lower in the Short Term
  • 10 Day EMA Resistance Found at $1,276.1
  • Looking for more trade ideas for gold and other commodities markets? Register for our Q2 price forecast HERE.

After gapping lower to start this week’s trading, gold prices are again trending downward in the short term for Tuesday. Technically, gold prices continue to trade below its 10 day EMA (exponential moving average), which is found at $1,276.11. This line should be references as a point of ongoing resistance, and traders should note that prices have already being rejected here once today.

If prices continue to trend lower this week, traders may look for gold prices to next challenge the standing weekly low at $1,266.73. A move to this point may then be followed by a test of the April low at $1,243.83 and the 200 day MVA (simple moving average) at $1,238.13. In the even that gold prices rally, traders should first look for a technical breakout above $1,276.11. A move about this point would again expose the standing 2017 high found at $1,295.62.

Gold Price, Daily Chart & Averages

Gold Prices Trend Lower in the Short Term

(Created Using IG Charts)

Intraday analysis now has gold challenging its S1 pivot at $1,269.40. If price breaks below this value, it exposes both the S2 and S3 values of support found at $1,262.88 and $1,259.03 respectfully. Traders should note that if prices trade to either of these values, the commodity would then be trading to new weekly lows. In this bearish scenario, traders may then elect to next target the daily values of support mentioned previously.

In the event that gold rallies from present values, traders should first look for prices to trade above today’s central pivot at $1273.25. A move to this point would suggest a shift in momentum in the short term, opening the market to test key values of intraday resistance. This includes today’s R1 pivot found at $1,279.77. A move to this point should be seen as graphically significant as gold would be trading back above its 10 day EMA.

Gold Price, 30 Minute Chart and Pivots

Gold Prices Trend Lower in the Short Term

(Created Using IG Charts)

How can market sentiment be worked into your active trading strategy? Get our Free sentiment guide here.

Lastly, sentiment for spot gold remains at a positive extreme for Tuesday. Currently IG Client Sentiment totals read at +2.04. With 67% of trader’s net-long gold, a contrarian view of sentiment suggests that gold prices may continue to decline. If prices breakout to a new weekly low beneath $1,266.73, it would be expected to see sentiment totals remain at positive extremes of +2.0 or greater. Alternatively if gold prices rally and trade back above its 10 day EMA, it would be expected to see sentiment figures move back towards more neutral values.

Gold Prices Trend Lower in the Short Term

--- Written by Walker, Analyst for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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