Gold Technical Analysis: Trapped in a sideways channel
|- Gold is moving in a sideways channel on the daily chart.
- The odds are stacked in favor of range breakdown.
Gold is trading in a sideways manner around $1,461 per Oz in Asia.
The yellow metal is trapped in a sideways channel, represented by trendlines connecting Nov. 12 and Nov. 26 lows and Nov. 20 and Dec. 4 highs.
A channel breakdown, if confirmed, would imply a resumption of the sell-off from highs above $1,500 and open the doors for the 200-day average at $1,406. At press time, the lower edge the channel is seen at $1,454.
A range breakdown looks likely, as the odds are stacked in favor of the bears. For instance, the 50- and 100-day moving averages.
Also, markets have priced out prospects of a Federal Reserve rate cut in 2020. A range breakdown, however, would remain elusive if the planned US tariff hike on $160 billion of Chinese imports takes effect Sunday. That will likely boost haven demand for gold.
Daily chart
Trend: Neutral-to-bearish
Technical levels
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