Top Story

Gold Faces Near-Term Headwinds, Bears Eye Break Of 1,480

A stronger USD, prompted by the Trump probe, has seen metals under pressure with gold shedding over -1.8% by the close.


Whilst prices have remained supported above 1,480 the potential for near-term weakness seems apparent, given yesterday’s 2-bar reversal. Eagle-eyed candlestick traders could note that yesterday’s bearish bar doesn’t quite pass as a bearish engulfing or outside day. Yet the -1.8% decline was the 2nd most bearish daily range this month and marks a prominent lower high, a scenario discussed two weeks ago. “…given the levels of support nearby [1,480], a minor bounce could materialise and form a lower high, ahead of breaking below $1480”. Furthermore, a bearish divergence had been forming with RSI since late June to warn of weakness to the trend, although prices need to break beneath 1,480 to confirm a reversal.

  • Ultimately, the daily trend remains bullish above 1,480, so bulls could hold out to see if a higher low is formed or seek to buy dips above this level.
  • Bears could seek counter-trend setups whilst the 1,535.69 high caps as resistance and target 1,480
  • Alternatively, bears could wait for a break below 1,480 to confirm a head and shoulders top, If successful, the H&S projects an initial target just above 1,400


We also note that the S&P500 and USD/JPY have printed 2-bar bullish reversals above support zones. Whilst we won’t claim it to be a true risk-on signal, that is coincides with the bearish candle on gold adds credence to the argument that gold could face headwinds over the near-term. So traders would do well to also monitor these markets alongside gold for a full picture to the dynamics (ie, USD/JPY reversing could be a warning for gold bears that downside may be limited).


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

The markets are moving. Stop missing out.

Open an Account