Gold unexpectedly collapsed – How low can Gold go this week? [Video]
|Gold unexpectedly collapsed last week after making a new all time high. There was no indication from short term or the daily chart that the correction was about to occur & I do not believe it was all down to a stronger PMI number, when the dollar did not climb significantly against other currencies.
-
As I warned, a close last week below the previous week's low of 2332 leaves an important bearish engulfing candle on the weekly chart. (When a new all time high is reached & the price then collapses below the previous candle low, creating a bull trap, when longs are holding losing positions). Although we closed a point above 2332, it still qualifies as a bearish engulfing candle in my view. (See chart).
-
Although I will not take this as an immediate sell signal, it is a warning to bulls that the bull run may be over at this stage. It could mean we consolidate in a sideways channel, it does not necessarily mean prices are about to collapse, although I would not be surprised to see us drift lower to 2310/00 at the start of this week. I then need to see what pattern develops.
-
Just 1 thing to note, I think last week's high is too far above the April high for a double top pattern to be relevant. So it's not as negative as it could have been.
-
On Friday I thought we could see a recovery & I wrote: Gains could be limited, with nervous short term bulls trapped in some losses, so a high for the day around 2350/55 is possible.However we only made it as far as 2347.
Silver
-
Silver collapsed through my buying opportunity at 3100/3080 with stops triggered below 3050.
The break lower signalled a slide as far as a buying opportunity at 3010/3000.
This target was quickly achieved with a low for the day exactly here.
Longs need stops below 2970. -
Targets for our longs are 3055/60 & even 3095/99 is possible.
-
However a break below 2970 is a sell signal for today, targeting 2930/25, perhaps as far as strong support at 2900/2890.
Expert daily technical analysis, signals & trade ideas for Gold Silver & WTI Crude:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.