Gold (XAU/USD) prices closed last month at $1,233.81, confirming a revival of the long-term bear market.
Monthly chart
The pennant breakdown seen in the above chart indicates the rally from the 2015 low of $1046 has ended and the downtrend, which began from the 2012 high of $1,800, has resumed.
The relative strength index (RSI), which pierced the ascending trendline in May, has now found acceptance below 50.00 (in the bearish territory).
The 5-month and 10-month moving averages (MAs) are also biased toward the bears.
As a result, the yellow metal could continue losing its shine for the rest of the year and is seen revisiting the December 2016 low of $1,122 in early 2018.
While the long-term outlook has turned bearish, in the short-term a minor corrective rally cannot be ruled out as the metal looks oversold as per the daily chart indicators.
Daily chart
The large bullish divergence of the relative strength index (RSI) favors a stronger corrective rally towards the downward sloping 5-month, currently located at $1,260. Such a move might create an impression that the long-term bearish breakdown has failed, however, it could be a temporary move aimed at crowding out weak hands (bears with limited risk appetite).
Only a monthly close above the 10-month MA, currently located at $1,287, would invalidate the monthly chart pennant breakdown.
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