Gold has seen significant downside movement over the last two months, falling around $170 over that period. However, the rebound to the downside over the past weeks has provided evidence that we are likely to see significant downside momentum over the coming period. A subsequent look at the longer term charts point to the potential for price to reach $1224.
The weekly chart below indicates the clear rejection of the rally in place since the losses of mid May. This subsequently points to the higher likeliness of this rally representing a temporary retracement for the pair and a move lower towards 1320. The chart below shows the existence of a key trend-line, which has acted as resistance over the recent weeks, which has originally provided support back in 2012.
Taking a look at the monthly chart, it provides an overview of the double top formation, which was completed by the break through 1522 last month. This move is clearly bearish and should we follow the theory strictly, the target for our current downtrend would be 1224. However, by utilizing the Fibonacci extension, a shorter term target would be 1405.
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Gold Looks Bearish: Could We See $1224?
Published 05/15/2013, 08:39 AM
Updated 05/14/2017, 06:45 AM
Gold Looks Bearish: Could We See $1224?
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