Gold in Depth

Gold is fluctuating near the critical support for the medium term bullishness as seen above. Following the last steep downside wave, the support held against gold’s downside attempts supported by the 100 Days MA and positive signs from momentum indicators.  Gold

Yet closely, and as provided on the secondary image, a bearish formation has been completed, especially with the breach of the neckline at 1192.50 and retesting it twice, which supports the possibility for the metal to breach the general upside wave and extend the short term downside move as it’s the correction for the entire medium term bullishness which started from the bottom at 681.18 to the historic high at 1265.05; the first target for the breach resides around 1127.00. We expect high volatility due the conflicting positive momentum and the bearish pattern’s downside pressure and therefore we should observe trading and especially daily closings around 1192.50 and 1178.00; while we support the likelihood for further bearishness over short term basis.Note that breaching 1219.00 fails the bearish scenario and will push gold strongly to the upside. 

By: Yasir Mubarak
Senior Technical Analyst