- Gold witnessed some follow-through selling for the fourth consecutive session on Thursday.
- Oversold conditions on the 4-hourly chart helped bulls to defend 100-DMA, at least for now.
- The set-up favours bearish traders and supports prospects for further near-term weakness.
Gold extended this week's bearish breakdown momentum through a descending triangle support near the $1900 mark and dropped to two-month lows, around the $1850 region on Thursday.
The downfall, marking the fourth consecutive day of a negative move, stalled just ahead of 100-day SMA support. The commodity now seems to have entered a bearish consolidation phase and was seen oscillating in a range through the early North American session.
Given the overnight break through the 50% Fibonacci level of the $1671-$2075 positive move and a subsequent fall below August monthly swing lows, the near-term bias still seems tilted in favour of bearish traders and supports prospects for further weakness.
Meanwhile, bearish oscillators on the daily chart are still far from being in the oversold territory and add credence to the negative outlook. However, oversold conditions on the 4-hourly chart extended some support to the yellow metal and helped limit deeper losses.
That said, any attempted recovery might still be seen as a selling opportunity and run out of the steam rather quickly near the $1870-72 region (50% Fibo. level). Above the mentioned barrier, a bout of short-covering move could push the commodity back above the $1900 mark.
On the flip side, the 100-day SMA, around the $1845 region, might protect the immediate downside. Some follow-through selling might turn the commodity vulnerable to accelerate the downward trajectory further towards the 61.8% Fibo. level support near the $1825 region.
Gold daily chart
-637365515809185903.png)
Technial levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.