Gold Prices Stage Another Bearish Step-Lower

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• Gold Technical Strategy: Intermediate-term bullish, short-term bearish.
• Gold prices have put in another lower-low and lower-high, with current support showing around the ‘S3’ zone we looked at on Monday.
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In our last article, we looked at the gap-lower in Gold prices after this weekend’s elections in France. As French election results began filtering in on Sunday, so did a return of risk tolerance. Global equities ramped-higher, the Yen sold-off, and Gold prices dropped down to a key zone of support around the $1,270 level. But as we had warned, given the recent lower-low and lower-high accompanied with a return of risk tolerance, and there could be additional down-side in near-term price action for Gold prices.

Since then, Gold prices have put in yet another lower-low and lower-high, with support showing-up right around the ‘s3’ zone of support that we were looking at on Monday; and this took place after a ‘resistance check’ of prior support around that prior area of support just shy of $1,280. On the 4-hour chart below, we’re looking at this continuation of bearish price action with the aforementioned levels applied to the chart:

Chart prepared by James Stanley

This continuation of bearish price action would allude to the potential for a deeper move-lower. For traders looking to add short exposure, they’d likely want to temper approach based on how aggressively they wanted to treat the move. For those that want to move forward with a bit more caution or a bit more conservatively, letting the move pull back a bit deeper – to the area between $1,273-$1,276; while those looking to treat the move more aggressively might want to look at the zone between $1,267-$1,270 for that next ‘lower-high’.

Stops for short positions could be adjusted to above the prior ‘lower-high’, with targets cast towards $1,261 and then our ‘s4’ zone of support shown above around the $1,250 psychological level.

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

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