Gold remains heavily bearish on the daily chart

Gold_chart_25_7_2014Gold futures sold off sharply once again yesterday, with the precious metal plunging through the $1300 per ounce level, to close the trading session for the December contract with a wide spread down candle shedding $14 per ounce on the day. The latest fall came against the backdrop of a failure to breach the $1330 per ounce region of price resistance, clearly defined on the chart with the red dashed line. This is a deep level which was also the barrier to the recovery in April.

Volume too, is confirming the bearish picture, with rising volumes over the last three days and coupled with the deep upper wicks to the candles of the last week, this is adding further negative sentiment for longer term gold investors. The metal is now approaching a key level of potential support in the $1287 per ounce region, and if this is breached, then expect to see further downside momentum for gold in due course, and a deeper move towards the next level below at $1262 per ounce. As always, after such a fall, expect a bounce today helped with some short term weakness in risk assets.

By Anna Coulling

About Anna 1040 Articles

Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

3 Comments on Gold remains heavily bearish on the daily chart

  1. Anna
    Ask your self a question, with all the problems in the world gold should be hitting the moon, why one word manipulation,


  2. Playing Devil’s Advocate: Gold is headed for 1360. Why? World NOW! in WAR-MODE! Iraq, Ukraine, Gaza, all over Africa. USA now biggest debtor nation in history of WORLD! BRICS nations attacking US-dollar. UK & China selling off Treasury Bonds (70% +) to buy Metal Mines around the World. People losing faith in PAPER! US TREASURY AUCTION (8/15-16/2014) will TELL-the-tale! WHO WILL BUY? INTEREST RATES will HAVE-TO be RAISED! = THE STRAW that breaks the USA CAMEL-BACK = $17 TRILLION DEBT LOAD! BANKRUPTING THE USA! The BEGINNING of the END! Ha! LOOK OUT “CHICKEN LITTLE”!!! HERE-IT-COMES! Ha,Ha! (GOLD–7/24 – 7/25 Big Volume TURN-A-ROUND! MY GUESS: GOLD will NOT go lower than 1290.)) GOOD ADVICE:–> = “Trade what you SEE! NOT what you THINK!” YES! BUT! When what you SEE, CONFIRMS what you THINK, THAT’S GOOD! WHY is it SOOOOO HARD to see Tops & Bottoms? Market-Makers CAN disguise VOLUME by where they CLOSE TRADING for the day! Don’t YOU think so?!

    • Hi William, many thanks for your comments on gold and as always there are two sides to the market, and indeed several ways to view the commodity itself whether technical, fundamental or from a relational aspect. My own perspective is based on all three, but as with many other markets at present, the rules have changed over the last few years since the crisis that enveloped world markets in 2007. Since then, we have been living in a world where price discovery is no longer the norm with bloated bond markets and manipulated interest rates globally. With such a deep recession, inflationary drivers for gold are non existant and whilst safe haven still applies, many other markets and paper based assets have now stepped into this arena. As you say, it’s a case of trade what you see and not what you think – ultimately gold will move higher in the next few decades, as will oil and other scarce commodities, purely from a supply perspective, but then this is only one aspect, and of course with gold, it is never consumed, but simply stockpiled ever higher and moved from one holder to another – very different to oil. From a technical perspective and applying volume price analysis, coupled with a possible recovery in the US dollar, I believe that gold remains weak, and is likely to move below $1300 and back towards the recent double bottom in the $1200 per ounce region. From there its anyone’s guess and if this is broken then a deeper move becomes incresingly likely. But then of course, this is simply my own longer term view and I’m sure others will disagree, and as always any market shocks from world events will always play their own unique part in driving gold, albeit on a short term basis. Hope the above helps and many thanks again – and good trading – Anna

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