Gold bounces to form triple bottom

<p>Gold (daily chart shown below) has bounced almost precisely off major support around the 1180 level. This rebound tentatively forms a triple bottom pattern in […]</p>

Gold (daily chart shown below) has bounced almost precisely off major support around the 1180 level. This rebound tentatively forms a triple bottom pattern in conjunction with the two previous 1180-area lows in late June and late December of 2013.

The past two months have seen the precious metal drop sharply. Price action broke down below a large triangle pattern in early September followed by several key support levels, including the last major low around 1240 that was hit in June.

The recent declines were accelerated somewhat by the better-than-expected US non-farm-payrolls report late last week, which helped push the price of gold down to a nine-month low around 1182 before rebounding.


Lending to the bearish technical picture is the fact that the 50-day moving average crossed decisively below the 200-day moving average in September, a condition that has not occurred since early 2013.

In the event that the tentative triple bottom around the 1180 support area holds with a continued rebound off support, key upside resistance resides around the noted 1240 previous support level, followed to the upside by the 1265 level.

Any breakdown below 1180 support could prompt a further decline towards the 1100 target price level.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.