Gold setting up a for a move lower?
With a new lower high and rallying stocks could we see a move lower in Gold?
Looking at Gold’s daily chart we can see some signs supporting sellers are building in numbers. Another factor to watch is equity markets and the USD. Indexes started the week higher in the U.S and the USD has also started the week mainly higher. What we’re watching at the moment is the new lower high (LH) that’s formed after the fast trend break. This is suggesting to us that sellers are building and could start a new leg lower.
What we would like to see to confirm this idea is a new move below 1566 with a close. This reinforces that sellers are holding current momentum and the lower high remains valid. We see S1 and S2 as resistance points from buyers if sellers can move price down to test those levels.
You will notice a fail point on the chart below if buyers can break above that point and close we would start to think that this idea has a good chance of failing and that buyers maintain short term momentum. With the price of gold traders could also keep an eye on momentum in the USD and equities.