Richard Perry
Independent Analyst
The outlook for gold is under pressure after a strong decline on Friday posted a bearish candle that is putting significant pressure on the bottom of the range that has built up over the past few weeks. The support at $1178 was breached on an intraday basis but the close just above the support suggests the move has not been confirmed (whilst the further bounce today adds to this view. The momentum has deteriorated slightly in the past few days without turning sharply negative, although the Stochastics turning negative is a concern as it suggests that there is a build-up of selling pressure. The intraday hourly chart is interesting as the rally overnight in the Asian session has dragged the price back to the resistance of the previous support at $1183.70 which is now an area of resistance. The last few days has seen a sequence of lower highs being formed with hourly RSI and MACD taking on a more bearish configuration. This would suggest that using this rally to sell is now the option. The resistance of the previous highs comes in at $1196/$1198.
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