Gold Price Analysis: Some daily & weekly chart technical signals point to a retracement

  • There is a divergence on the weekly chart that could point to a move lower.
  • The price is still in an uptrend but there are some suggestions it is overextended.

Weekly chart

The weekly chart is showing a massive three-wave divergence on the Relative Strength Index indicator (RSI). This is sometimes a sign that the price might be starting to pull back from its mammoth uptrend in recent times. 

The USD 1800.00 level did look like the target in this bull run but there could always be a small retracement on the way to the major level. in the other weekly chart below this one, I have colour coded the support levels from the last consolidation at the highs. USD 1676.78 is the next major support on the downside. This purple line is the mean value area from the last consolidation and it had been used on a few good occasions to provide both support and resistance

Gold weekly divergence

Looking closer at the zone, the orange level at USD 1534.00 is the main consolidation low. It would be quite a deep retracement if the price came that low but stranger things have happened. If there is a firm break below there then the market could be looking at a change in the underlying trend. For now the trend is still up and this is just a small blip.

Previous gold consolidation

Daily Chart

Not only does the daily chart confirm the divergence the 38.2% and the 23.6% support zones confluence perfectly with Fibonacci zones. Keep a close eye on these levels as they look strong and match with the weekly support and resistance zones. 

The RSI is also showing a gradual trend lower and upside breaks of trendlines can also be an important signal that the trend could be continuing. Overall this is clearly still a bull market. The point now would be working out if it does retrace, how much? and where is the next entry point?.

Gold daily levels



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