Gold Technical Analysis: On the defensive at $1,310 after inside day bearish reversal

Omkar Godbole FXStreet Contributor

Gold closed well below $1,315 yesterday, validating the bearish inside day candle created on Tuesday. The pattern indicates that the bounce from lows near $1,280 seen on March 7 has ended and prices could revisit levels below $1,300 in a day or two.

Supporting the bearish case is the 4-hour chart relative strength index of 43.00 and the bear flag breakdown on the hourly chart.

Even so, sellers need to observe caution as recession fears are weighing over risk assets. As of writing, the futures on the S&P 500 index are down 0.43 percent. Meanwhile, the 10-year treasury yield hit a 15-month low of 2.345 percent soon before press time. That could weaken the US dollar, helping gold recover yesterday's losses.

The bearish setup would be invalidated if prices rise back above $1,320. As of writing, the yellow metal is trading largely unchanged on the day at $1,300.

Daily chart

Trend: Cautiously bearish

1. R3 1327.61
2. R2 1323.49
3. R1 1316.6
PP 1312.48
1. S1 1305.59
2. S2 1301.47
3. S3 1294.58

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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