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Is Gold Heading For Lower Lows?

ByJames Chen
Published 12/04/2013, 08:48 AM
Updated 07/09/2023, 06:31 AM
GC
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Gold Daily Chart
Gold (daily chart) has shown marked weakness since its $1433 high in late August. From that high, the precious metal dropped down to a low of $1251 in mid-October before pulling back up to $1361 in late October, which was the 61.8% Fibonacci retracement of the prior bearish leg.

Since that upside pullback, gold has fallen sharply for the past month on its way towards its major downside objective – the key $1180 level, which was the multi-year low that was last established in late June. A breakdown below $1180 would confirm a continuation of the sustained bearish trend in gold that has been in place since the October 2012 high near $1800. A continued bearish environment should prevail for the precious metal, as the price of gold is well below its 50-day moving average which is, in turn, well below the 200-day moving average. Any strong breakdown below the noted $1180 low could potentially begin to target further downside around the $1000 psychological support level.

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