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Gold Breakdown Completes Big Medium Term Top Pattern

GOLD (XAU) Overview

Trading Outlook:

A closing breach of $1276 is a big bearish breakdown and completes a big medium term top pattern to imply $1206. Intraday rallies are increasingly being sold into.

  • $1270.60 – Intraday low 18th April
  • $1266 – 20th December high
  • $1250 – 10th December high
  • $1280 – Old key support is initial resistance
  • $1290 – Near term pivot
  • $1296.50 – 12th April high
Today’s Morning Commentary:

Often when there is a strong move, the next session can see a retracement. The concern is that for much of yesterday’s session, gold was trying for a recovery, but there was little appetite to buy. A close below $1276 is a key downside break. It now means that the old key support band $1276/$1280 is a basis of resistance. Yesterday’s close below $1276 has confirmed what looks to be an increasingly negative outlook on gold. Such is the importance of the breakdown, a second closing breach of $1276 would confirm the bears being in control. A head and shoulders top pattern implies $70 of additional downside in the coming months. This means a retreat towards $1206 could be seen in the coming months. The outlook is increasingly negative now, with the support of the eight month uptrend at $1259 and the 144 day moving average (at $1273) being the only positive technical signals. The next real support is not until an old pivot around $1240. The hourly chart shows resistance is at $1280 initially and a pivot at $1290. This all comes under the long term pivot band $1300/$1310 which is increasingly key resistance.

Chart of the day:

Daily XAU

Hourly XAU

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    Research Risk Warning

    At Hantec Global Ltd we provide an execution only service. Any opinions expressed by analyst Richard Perry should not be construed as investment advice or an investment recommendation. This report does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Forex and CFDs are leveraged products which can result in losses greater than your initial deposit. Therefore you should only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such transactions.