Loading...
by Charalambos Pissouros

Gold Continues its Free Fall

XAU/USD traded lower today, breaking below the 1265 barrier. Yesterday, the metal closed the day below the upside support line taken from the low of 10th of July 2017, which combined with the fact that the price is trading below the tentative downtrend line drawn from the peak of the 11th of April suggests that the outlook is negative for now.

If the bears manage to stay in the driver’s seat, then we would expect them to drive the battle lower towards the 1252 support zone. Another break below that hurdle is possible to set the stage for more downside extensions and perhaps aim for our next support territory of 1240.

Looking at our daily oscillators, we see that the RSI slid below its 30 line and is pointing down, while the MACD lies below both its zero and trigger lines, pointing south as well. These indicators suggest strong downside speed and support the case for the yellow metal to continue drifting lower in the foreseeable future.

On the upside, a move back above 1265 could open the way for the 1275 resistance or the prior upside support line taken from the low of the 10th of July 2017. However, even if this is the case, we would treat such a recovery as a corrective rebound and we would still see a decent chance for another leg down from near those levels.

We prefer to wait for a clear close above 1290 before we start examining whether sellers have abandoned the battlefield. Such a move is likely to initially pave the way for the 1307 area, where another break may lead the precious metal towards the next resistance zone of 1325.

XAUUSDDaily 210618

 

Disclaimer:

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Brokers, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Brokers analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyzes and must therefore be viewed by the reader as marketing information. JFD Brokers prohibits the duplication or publication without explicit approval.

FX and CFDs are leveraged products. They are not suitable for every investor, as they carry high risk of losing your capital. You should be aware of all the risks associated with trading on margin. Please read the full Risk Disclosure.