- Negative RSI divergence suggests that a near-term top has already been formed.
- The overnight break below an ascending channel reinforces the bearish outlook.
- Sustained weakness below $1520 support should pave way for further declines.
Gold extended its sideways consolidative price action through the mid-European session on Friday and remained confined in a narrow trading band near the lower end of its weekly trading range, below the $1530 level.
Spot prices, so far, have managed to defend a support marked by 23.6% Fibo. level of the $1400-$1555 recent upsurge to multi-year lows around the $1520-18 region, which should act as a key trigger point for bearish traders.
Given a negative RSI divergence on the daily chart, the overnight slide below a short-term ascending trend-channel formation on hourly charts clearly suggests that the precious metal might have already topped out in the near-term.
The set-up seems to have shifted in favour of bearish traders and the negative outlook will further be reinforced on a sustained break through the mentioned support, which should pave the way for an extension of the corrective slide.
Below the mentioned support, Gold is likely to accelerate the fall towards the $1510-09 intermediate support en-route the key $1500 psychological mark and the next major support near 38.2% Fibo. level - around the $1495 region.
On the flip side, attempted bounce might now confront some fresh supply and seems more likely to remain capped at the ascending trend-channel support breakpoint - near the $1535-40 region - coinciding with 50-hour SMA.
Gold 1-hourly chart
-637027633337997352.png)
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
Australia’s Unemployment Rate increases to 4.1% in April vs. 3.9 % expected
Australia’s Unemployment Rate rose to 4.1% in April, compared with the expectations of 3.9% and the previous figure of 3.8%, according to the official data released by the Australian Bureau of Statistics (ABS) on Thursday.
USD/JPY trims losses below 154.50 following Japan’s GDP data
USD/JPY trims losses near 154.45 during the early Asian session on Thursday. The softer US CPI inflation data has exerted some selling pressure on the US Dollar. However, the major pair recovers modestly following the recent weaker-than-expected Japan’s Gross Domestic Product in the first quarter of 2024.
Gold rally continues with buyers eyeing $2,400 as inflation recedes
Gold price extended its uptrend for the second straight day on Wednesday and hit a three-week high of $2,390 after data revealed by the US Bureau of Labor Statistics showed inflation is ebbing, increasing the odds for a Federal Reserve rate cut in 2024.
Will CPI report showing inflation eased in April push BTC to $70K?
Bitcoin price jumped by 5% on Wednesday, seeing the American session outperform the Asian session for the first time in a while. Tailwinds sprouted fron US inflation release.
Dow Jones Industrial Average soars 350 points, sets new all-time high as rate cut hopes surge
The Dow Jones Industrial Average clipped into a fresh all-time high on Wednesday, gaining almost nine-tenths of a percent during the US market session after US Consumer Price Index inflation slipped further back.