Gold drops to key support
Fawad Razaqzada November 11, 2019 12:27 PM
The price of gold fell today to its lowest level since early August, hitting a low so far of $1448ish. The metal has therefore reached the technically-important $1450 level that we have been banging on about for the past few weeks, for example HERE. Fundamentally, I think gold prices could be headed higher in the long-term for the reasons I have given in the previous article. Technically, there is still the possibility for further weakness as my colleague Matt Simpson highlighted the possibility earlier in the day. However, if gold were to climb back above the previous month’s low and close there, around $1460, this would create a potential false breakdown reversal pattern. I think there is a decent chance of this happening since the bears have hit their main downside objective at $1450. If this turns out to be the case, then we could see some gains in the days ahead, at least towards the next potential resistance at $1480/2 area. BUT we have to see that reversal candle first – such as those plotted in the inset. A closing break (well) above $1460 would help create such a bullish-looking hammer candle on the daily chart.
Source: Trading View and FOREX.com.
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.