Gold Price Analysis: Prints 5-week low, bearish engulfing candle on weekly
- Gold prints lowest level since Feb. 5, having dropped for a third straight day on Thursday.
- The weekly candle has neutralized the broader bullish outlook.
- A minor corrective bounce may be seen as intraday charts are reporting bullish divergences.
Gold is on the offer for the fourth straight day.
The yellow metal is currently trading at $1,562 per Oz, representing a 0.90% drop on the day, having hit a low of $1,551 a few minutes before press time.
That was the lowest level since Feb. 5. Prices dropped 3.5%, 0.93% and 1.82% on Thursday, Wednesday and Tuesday, respectively.
Focus on the weekly candle
With a drop from $1,704 to $1,551, the yellow metal has engulfed the price action seen in the previous four weeks.
The big bearish engulfing candle suggests the rally from the August 2018 low of $1,1160 has run out of steam. The metal could consolidate with a negative bias in the short-term.
Acceptance under the immediate support at $1,557 (September 2019 high) could cause more sellers to join the market, leading to deeper declines toward $1,500.
On the higher side, consecutive daily closes above $1,600 are needed to revive the immediate bullish view.
At press time, the hourly chart is reporting a bullish divergence of the RSI and the MACD histogram. As a result, the metal could recover to $1,580.
Weekly chart
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Hourly chart
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Trend: Neutral
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
