Gold Slides After Hitting Resistance Near 1237
JFD Team | Nov 08, 2018 07:45AM ET
Gold traded lower after it hit resistance fractionally below the 1237 barrier. Although the metal continues to trade above the medium-term downside line drawn from the peak of the 11th of April, as well as above the upside support line taken from the low of the 16th of August, in the short run, it remains stuck within the range that has been containing most of the price action since the 15th of October, between 1220 and 1237. Therefore, we will adopt a flat stance for now with regards to the near-term outlook.
If the bears maintain their momentum and manage to overcome the 1220 barrier, which is the lower end of the aforementioned range, then we may experience extensions towards the low of the 31st of October, at around 1212. Another dip below 1212 could set the stage for our next support, at around 1207, which is near the peaks of the 2nd, 3rd and 4th of October.
Shifting attention to our short-term momentum studies, we see that the RSI lies below 50 and points down, while the MACD stands below both its zero and trigger lines, pointing south as well. These indicators detect negative momentum and support the notion for this metal to keep trading lower for a bit more.
On the upside, we would like to see a clear break above the range’s upper bound, at around 1237, before we start examining whether the bulls have taken the upper hand. Such a break may initially aim for the peak of the 26th of October, near 1243. However, we would like to see a move above the 1245 zone, marked by the highs of the 16th and 17th of July, before we get confident on more upside extensions. Such a break could pave the way for the psychological barrier of 1250.
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