Gold Price Analysis: Trapped in descending triangle amid risk-off


  • Gold is being squeezed in a triangle pattern amid recession fears and risk aversion. 
  • A breakout would put the bulls in a commanding position, yielding notable recovery rally. 

Gold is struggling to shine amid fresh risk-off in the markets with prices trapped in a descending triangle pattern on the 4-hour chart. 

So far, the top end of the triangle, currently at $1,508, has proved a tough nut to crack. A breakout would imply an end of the sell-off from recent highs above $1,700 and could yield a rally to $1,550.

Alternatively, a triangle breakdown would suggest a continuation of the sell-off from $1,700 and expose support located at $1,445 (November low). 

At press time, the yellow metal is changing hands at $1,496 per Oz, representing a 0.11% drop on the day, even though the futures tied to the S&P 500 index are down 5%. 

"An economic tsunami has been unleashed. A consensus appears to be emerging among economists of the largest contraction in global GDP in a generation," according to Marc Chandler, Chief Market Strategist, Managing Partner, Bannockburn Global Forex.

Even so, gold is down 5.6% on a month-to-date basis, possibly due to the global dash for the US dollar. The greenback has become a preferred safe haven and the dollar index has gained over 4% so far this month. 

4-hour chart

Trend: Bullish above $1,508

Technical levels

XAU/USD

Overview
Today last price 1495.74
Today Daily Change -3.32
Today Daily Change % -0.22
Today daily open 1499.06
 
Trends
Daily SMA20 1596.02
Daily SMA50 1582.85
Daily SMA100 1535.3
Daily SMA200 1503.19
 
Levels
Previous Daily High 1516.19
Previous Daily Low 1455.54
Previous Weekly High 1561
Previous Weekly Low 1451.3
Previous Monthly High 1689.4
Previous Monthly Low 1547.56
Daily Fibonacci 38.2% 1493.02
Daily Fibonacci 61.8% 1478.71
Daily Pivot Point S1 1464.34
Daily Pivot Point S2 1429.61
Daily Pivot Point S3 1403.69
Daily Pivot Point R1 1524.99
Daily Pivot Point R2 1550.91
Daily Pivot Point R3 1585.64

 

 

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