Watching For A Reversal In Gold
Dragonfly Capital | Jun 03, 2016 07:27AM ET
If you are watching for a reversal higher in gold you are not alone. After the run higher off of the December low it had gained more than 25%. But since then it has failed to keep that same momentum to the upside. Falling back at 1278 it found support around 1210 and ran to a higher high, touching 1300.
The round number proved to be too much for gold though. It has now lost nearly $100 since touching 1300 and pushing down through the prior support area. So if you are waiting for that reversal I am sorry to say it may not be coming anytime soon.
The chart above shows the pullback has now almost reached a 38.2% retracement of the Shark harmonic. With the push under the 100 day SMA and the prior support level at 1215 this appears to be the next target. There is prior support below that at 1180 and 1140. The RSI is in the bearish zone and falling, though not oversold. The MACD is also falling and no where near extreme levels. Finally the Bollinger Bands® are pointing and opening to the downside.
Gold may not have a lot of downside left in it, but it seems with Thursday’s action that the downside is still the path of least resistance and the path it will take in the near future.
DISCLAIMER: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.