Gold Price Established a Medium-term Bearish Trend?
Aayush Jindal
Key Highlights
Gold price after trading towards $1300 in mid-April 2017 faced a strong resistance, and started a downside move.
There was a break below a monster ascending channel support at $1240 during the start of May 2017, signaling a bearish bias.
The downside move extended this week, and now sellers eye a break below $1200.
Today, the US Consumer Price Index for April 2017 will be released by the US Bureau of Labor Statistics, which is forecasted to increase by 0.2% (MoM).
Gold Price Technical Analysis
Gold price struggled during the past few weeks against the US Dollar and traded below $1250-40. Let’s have a look at the bigger picture and try to analyze a medium term trend.As mentioned in the highlights, there was a break below a monster ascending channel support at $1240 on the daily chart during the start of May 2017. It has opened the doors for further declines in the near term.The price has also moved below the 38.2% Fib retracement level of the last major move from $1122 to $1295. The daily RSI is also heading lower, and currently well below the 40 level.Let’s drop down to the 4-hours chart of Gold Price. It clearly shows a solid bearish trend with resistances on the upside near $1235 and $1245.There is a bearish trend line formed as well with resistance around $1238. Any rallies from the current levels towards $1235 may face sellers.On the downside, a break below the recent low of $1214 may call for a move towards $1200. In the medium term, sellers could even attempt a break below $1200.
Economic Releases to Watch Today
German Consumer Price Index for April 2017 (YoY) – Forecast +2%, versus +2% previous.
German Consumer Price Index for April 2017 (MoM) – Forecast 0%, versus 0% previous.
German Gross Domestic Product for Q1 2017 (YoY) (Preliminary) – Forecast 1.7%, versus 1.2% previous.
German Gross Domestic Product for Q1 2017 (QoQ) (Preliminary) – Forecast 0.7%, versus 0.4% previous.
US Consumer Price Index April 2017 (MoM) – Forecast 0.2%, versus -0.3% previous.
US Consumer Price Index April 2017 (YoY) – Forecast +2.3%, versus +2.4% previous.
US Consumer Price Index Ex Food & Energy April 2017 (YoY) – Forecast +2%, versus +2% previous.
US Retail Sales April 2017 (MoM) – Forecast +0.6%, versus -0.2% previous.
As mentioned in the highlights, there was a break below a monster ascending channel support at $1240 on the daily chart during the start of May 2017. It has opened the doors for further declines in the near term.The price has also moved below the 38.2% Fib retracement level of the last major move from $1122 to $1295. The daily RSI is also heading lower, and currently well below the 40 level.Let’s drop down to the 4-hours chart of Gold Price. It clearly shows a solid bearish trend with resistances on the upside near $1235 and $1245.
There is a bearish trend line formed as well with resistance around $1238. Any rallies from the current levels towards $1235 may face sellers.On the downside, a break below the recent low of $1214 may call for a move towards $1200. In the medium term, sellers could even attempt a break below $1200.