Gold continued its downtrend falling $15 in the week which again was a $20-$22 ranged one. The fresh decline raises the bar for further downside as technical support of a pattern gave way which was also retested it the week itself allowing it to become an immediate resistance for the price going ahead. Fundamental news keep coming out and last week saw the re-surface of much talked ‘impeachment’ of American President which can again sway the prices. The bearish trend is getting stronger on every passing week given the price movement.
Gold moved only down after it had opened indicating the metal indeed has been under immense selling pressure ever since it had broken down. Another pattern breakdown is playing out and the price is expected to head lower enhancing bearish trend . We have 2 scenarios –
1. Bulls continue to remain off the grid given the breakdowns happening excepting scalp trading.
2. Gold closed well below the support, till this is respected it can move towards $1273. If this is taken out it can fall to $1260. And if this is broken it can slide towards $1248.
Bullish view remains scanty to nil given the trend development.
Bearish view – Bears stomped forward eroding another $15 from the value of gold as trend continues to deepen owing to the breakdowns. Bears registered a fresh low as risk-on continues to gather steam. More downside room has been created after last week’s move. For bears to remain in the driving seat they need to keep the price below the supports and new lows can be expected with the next major support area being $1236-$1240.
On larger terms, Gold continues to remain bearish and prices are expected to head lower.
Possible trades are on both sides, gold can be bought once it breaks out of the flag or at the bottom of the flag/channel.
Gold can be sold under $1271 for the targets of $1260 and $1248 with a stop loss placed above $1284.
A sell-on-rallies can be useful under current scenario.
Reference: Trading View
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