Gold technical analysis: Risks skewed to the downside after failed breakout
|- Gold's daily chart shows a failed falling channel breakout.
- Monday's drop confirmed a bearish candlestick reversal pattern.
- The yellow metal could drop to support at $1,481.
Gold is looking south, having witnessed a failed breakout in the previous two trading days.
The yellow metal closed at $1,504 on Friday, confirming an upside break of a falling channel, represented by Sept. 4 and Sept. 24 highs and Sept. 10 and Oct. 1 lows.
The breakout was confirmed with a Gravestone Doji and looked weak and was short-lived, as prices fell 0.80% on Monday.
Put simply, Monday's close at $1,490 activated twin bearish cues: a failed breakout and a Gravestone Doji reversal.
Gold, therefore, is likely to face selling pressure on Tuesday. The yellow metal is currently trading at $1,491 per Oz and could drop to support at $1,481 (Oct. 22 low).
The bearish case would be invalidated if prices rise above Monday's high of $1,508.
Daily chart
Trend: Bearish
Technical levels
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