Gold Price Technical Outlook Looks Near-term Bearish
Gold Price Technical Outlook: Bearish
- Sizable resistance standing in the way
- General short-term trend and price action look bearish
Gold looks poised to decline in the week ahead
Gold experienced a little strength last week as it recovered from its worst levels since July, but this isn’t expected to last. There is resistance and a generally weak trend off the August high that look poised to keep gold pointed lower. The bounce, itself, has a corrective look to with a ‘wedge-like’ pattern developing – this suggests price action is corrective in nature.
A turn down and decline below 1848 will have the important area surrounding 1800 in focus. It’s a level that gold hesitated at in July before exploding to new record heights. Its importance resulted from three peaks created during 2011 and 2012 as part of the topping process gold underwent before falling into a multi-year bear market.
Looking a bit further ahead, the next few months should bring some volatile trade. While the short to intermediate-term looks skewed towards more weakness, the broader trend remains pointed higher. If price holds the 1800 area mentioned above, then that could end the decline for the bigger picture rally to reassert itself. A little more weakness below there and the rising 200-day MA (currently 1735) may come into play and could be the support needed to end the bull market correction.
Before thinking about that, in the near-term I will be watching for a rejection from resistance and breaking of the short-term corrective bounce to become more aggressively biased towards the downside.
Gold Price Hourly Chart (Price action looks corrective)
Gold Chart by TradingView
Gold Price Daily Chart (looks headed lower for now)
Gold Price Weekly Chart (2011/12 peaks could be important again)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.